British pound falls before Bank of England rate decision

The British pound fell from 1.6110 USD to 1.6038 USD in morning European session, loosing 0.4%, before Bank of England's decision on interest rate. Although the last CPI figures showed that the inflation rate rose at its highest in eight months, the GDP for the last quarter showed the economy shrank with 0.5%, which makes for a difficult decision today. The minutes published after the last BoE meeting showed the central bank is mainly interested in tackling inflation, but the market doesn’t expect an interest rate at Thursday’s meeting. The euro fell steeply against the dollar, loosing 0.7% and trading at 1.3622 USD, after a rise on Wednesday due to decreasing US yields. Fed’s Chairman Ben Bernanke erased any expectations for an interest rate increase on the short term and gave no indication that the central bank would cut short its bond buying programme. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was up 0.6%, at 78.11. Against the yen, the dollar rose 0.4%, at 82.66 JPY.

Euro falls below 1.36 USD, sterling steady after brief fall due to BoE rate decision

The euro is extending its losses against the dollar, due to heavy Asian selling, while the British pound slightly fell after the Bank of England announcement that interest rate remains unchanged. The euro fell steeply against the dollar, loosing 1.05% to trade as low as 1.3585 USD, after heavy selling coming from Asia. The currency had risen a day before due to decreasing US yields, after Fed’s Chairman Ben Bernanke gave no indication that the central bank would cut short its bond buying programme or increase interest rates. The euro lacked momentum when debt fears eased across the euro zone, although a final decision regarding the strengthening of the European Facility Stability Fund (EFSF) will not be taken until end of March. Wednesday’s report that Axel Weber will not be a candidate for replacing Jean-Claude Trichet as head of the European Central Bank (ECB) once his term expires in October contributed to lowering expectations for a near-term interest rate hike.

The British pound fell from around 1.6050 USD to a session’s low of 1.6024 USD after BoE announced that interest rate remains unchanged at a record low of 0.5%, according to market’s expectations. The sterling recovered some of its lost ground and was trading later at 1.6040 USD, but still down 0.4%. Investors will now focus on January’s consumer prices to be published on Tuesday, after the inflation rate hit its eight-month high in December. If inflation rate remains on the same trend, it will become harder for BoE not to raise interest rates, despite latest GDP figures, that showed a 0.5% economic contraction for the fourth quarter.

The dollar index, which tracks the greenback’s value against a basket of other major currencies, rose to 78. from 78.661 late Wednesday. Against the Japanese yen, the dollar was up 0.75%, at 82.97 JPY. The Australian dollar continued its fall against the dollar, loosing 0.95%, at 1.0029 USD.

US stronger economic perspectives bring dollar up against all major currencies

The dollar continued to climb against other major currencies and hit a one-month high against the Swiss franc, extending its gains also versus the euro as peripheral debt fears have decreased investors’ risk appetite. The US dollar has been lately supported by strong economic data and expectations of a continuing trend. US government bond yields increasing are boosting investors’ appetite for the US currency in search of profits. More over, Thursday data showed US jobless benefits falling more than expected in the latest week to the level from June 2008. The dollar index, which tracks the greenback’s value against a basket of other major currencies, is up 0.33%, at 78.51. Against the Swiss franc, pressures by weak Swiss inflation data published on Thursday, the dollar rose to a one-month high of 0.9717 CHF. Also against the yen the dollar is climbing to high levels, trading at 83.47 JPY, up 0.32%, after reaching a high of 83.58 JPY. The governor of the Reserve Bank of Australia (RBA), Glenn Stevens, said that interest rates are currently at an appropriate level and are likely to remain on hold for some time. The statement pushed the Australian dollar lower, trading at 0.9983 USD, down 0.55%, after going as low as 0.9967 USD. Euro zone is now confronting an increasing risk appetite, reappearing after debt fears had eased due to speeches that officials are trying to come up with a strong plan to tackle the region’s problems. But conclusions regarding a strengthening of the euro zone’s rescue fund, the European Financial Stability Facility (EFSF), will not be reached until end of March. More over, European Central Bank’s representatives had given hawkish signals that a rate increase might be on its way, but investors’ expectations were soon dashed by ECB chief Jean-Claude Trichet last speech. On focus is now Portugal, bond yields increasing to record levels of 7.6% on Thursday. The euro was hit by all the debt jitters surrounding the euro zone and extended its losses against the dollar, trading at 1.3541 USD, down 0.39%, after hitting a low of 1.3535 USD.

CORRECT: "Euro zone is now confronting a decreasing risk appetite.."

Originally posted by roxanaz

Euro zone is now confronting a decreasing risk appetite, reappearing after debt fears had eased due to speeches that officials are trying to come up with a strong plan to tackle the region’s problems. But conclusions regarding a strengthening of the euro zone’s rescue fund, the European Financial Stability Facility (EFSF), will not be reached until end of March. More over, European Central Bank’s representatives had given hawkish signals that a rate increase might be on its way, but investors’ expectations were soon dashed by ECB chief Jean-Claude Trichet last speech.
On focus is now Portugal, bond yields increasing to record levels of 7.6% on Thursday. The euro was hit by all the debt jitters surrounding the euro zone and extended its losses against the dollar, trading at 1.3541 USD, down 0.39%, after hitting a low of 1.3535 USD.

Dollar rally looses steam in opening American session, euro steadies against rival

The euro steadied against the dollar after a steep decline in opening American session, the greenback loosing some of its gains that helped the currency reach one-month highs against the yen and Swiss franc.

The dollar index, which tracks the greenback’s value against a basket of other major currencies, was up 0.4%, at 78.56, after reaching a high of 78.70, as positive employment data helped the currency. Also, stronger economic data and perspectives have lately supported the dollar, contrasting with debt jitters that returned to the euro zone. US government bond yield continued to increase, boosting investors’ appetite for the US currency in search of profits.

Against the yen, the dollar hit a one-month high of 83.67 JPY, later trading around 83.50 JPY, still up 0.32%. Against the Swiss franc, the dollar also reached a one-month high, of 0.9749 USD, and was trading around 0.9724 USD at the American trading session opening.

After reaching a low of 0.9962 USD, as the governor of the Reserve Bank of Australia (RBA), Glenn Stevens, said that interest rates are currently at an appropriate level and are likely to remain on hold for some time, the Australian dollar gained some of the lost ground. The Aussie was trading at 1.0000 USD, still down 0.43%. The euro steadied against the dollar around 1.3530 USD, down 0.54%, after losses that brought the currency as low as 1.3508 USD.

Euro zone is now confronting a returning risk aversion after debt fears had eased due to signs that officials are working on a plan to tackle the region’s problems. But conclusions regarding a strengthening of the euro zone’s rescue fund, the European Financial Stability Facility (EFSF), will not be reached until end of March. More over, European Central Bank’s representatives had given hawkish signals that a rate increase might be on its way, but investors’ expectations were soon dashed by ECB chief Jean-Claude Trichet last speech. 
On focus is now Portugal, bond yields increasing to record levels of 7.6% on Thursday.

More over, Egypt’s unrest is starting to come back into focus as President Hosni Mubarak said Thursday that he will transfer power following an election later this year, refusing to step down as expected by the mass of protesters in central Cairo.

Euro extends its losses as debt fears persist

The euro fell strongly in European Monday session opening, continuing to extend its losses, as debt fears are persisting across the euro zone. The euro broke the 1.35 USD level and fell as low as 1.3461 USD, later trading at 1.3476 USD, still down 0.26%. Spain and Italy are on focus this week, as they will tap international markets, especially after an increase in bond yields to record levels in the case of Portugal last week. European finance ministers will meet on Monday to discuss how to give the euro zone rescue fund more flexibility and how to tackle debt crisis after 2013, but conclusions are not expected before March. The European Financial Stability Facility (EFSF), a 440 billion euros bailout fund, was created last May, but guarantees built into the fund to maintain its triple A credit rating decrease its effective lending capacity to around 250 billion euros. Euro zone is now in the search of a solution to increase the capacity of EFSF to its initial level, but Germany and France, the most powerful countries in euro zone, are imposing measures like higher retirement age, national laws to cap debt, a common corporate tax base and bringing an end to wage indexing to inflation. These measures have been severely criticized by countries like Italy and Greece. The dollar fell against other major currencies and the dollar index was at 78.66. Against the yen, the greenback fell 0.3% to 83.09 JPY. The British pound was up 0.16%, trading at 1.6013 GBP

Euro continues fall after reports that German WestLB restructuring talks still blocked

The euro continued its fall in early American trading session opening, as debt fears are persisting across the euro zone. The 17-nation single currency was down 0.55%, at 1.3434 USD, after hitting a low of 1.3429 USD. A Reuters report said on Monday, without naming its sources, that aid for German ailing lender WestLB hangs in the balance, as a German steering committee failed on Sunday to reach an agreement on a restructuring model for the bank. The source added that a breakup of WestLB remained an option, with large parts of the bank's assets wound down. The news reinforced markets fears about the future of the euro zone. Portugal also published the GDP figures for the last quarter of 2010, which showed a quarterly economic contraction of 0.3%, bringing the annual growth to 1.4%. Spain and Italy are on focus this week, as they will tap international markets, especially after an increase in bond yields to record levels in the case of Portugal last week. European finance ministers will meet on Monday to discuss how to give the euro zone rescue fund more flexibility and how to tackle debt crisis after 2013, but conclusions are not expected before March. The European Financial Stability Facility (EFSF), a 440 billion euros bailout fund, was created last May, but guarantees built into the fund to maintain its triple A credit rating decrease its effective lending capacity to around 250 billion euros. Euro zone is now in the search of a solution to increase the capacity of EFSF to its initial level, but Germany and France, the most powerful countries in euro zone, are imposing measures like higher retirement age, national laws to cap debt, a common corporate tax base and bringing an end to wage indexing to inflation. These measures have been severely criticized by countries like Italy and Greece.
 The dollar took advantage of the euro fall, and the dollar index, which tracks the greenback’s value against a basket of other major currencies, was up 0.49%, at 78.84. Aganinst the yen, the dollar fell as low as 83.11 JPY, to recover later and trade at 83.46 JPY, still down 0.1%. The British pound fell also against the dollar, to 1.5985 USD from a high of 1.6078 USD, down 0.03%.

Euro falls after a short rebound, debt fears in focus

A stronger Asian demand shortly rebounded the euro, after a fall due to lower than expectations German GDP figures, but the 17-nation single currency was soon loosing ground again. The euro had fallen as low as 1.3461 USD, but stronger Asian demand pushed the currency to a high of 1.3542 USD. Later, it was trading around 1.3515 USD, up 0.17% on the day. The German economy grew at a slower pace than expected in the last quarter, of 0.4%, while the annual growth was 4%. The Italian and French economies had also a slower than expected economic growth during the last quarter, of 0.1% and 0.4% respectively. Meanwhile, euro zone is still confronting a spreading of debt fears. Finance ministers gathered on Monday managed to agree only on the permanent mechanism starting 2013, that would total 500 billion euros, but there was no news about the current rescue fund. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was down 0.15%, at 78.50. Against the yen, the dollar was up 0.3%, to 83.55 JPY. The British pound fell after January inflation of 4%, in line with economists’ expectations, disappointed some investors with expectations of a higher rate. The sterling was trading at 1.6022 USD, down 0.06%, after hitting a high of 1.6103 USD before the figures were published.

Dollar recovers after short fall on low US retail sales, sterling rallies against dollar and euro

The dollar started to recover the lost ground against the euro and yen due to lower than expectations US retail sales, while British pound rallies against euro and dollar on expectations of near term rate increase boosted by high inflation. U.S. retail sales rose 0.3% last month, less than analysts expected. Excluding autos, sales rose 0.3%. The dollar index, which measures the ‘s value against a basket of six currencies, fell to 78.30, from 78.50 before the data, but was later at 78.44. The euro was trading at 1.3525 USD from 1.3501 USD before the data, up 0.3% on the day. In early European trading, the euro reached high of 1.3552 USD on heavy Asian demand, from a low of 1.3541 USD. Euro zone economy grew with 0.3% in the last quarter, below expectations of 0.4%. Over the whole year of 2010, economy grew with 1.7% in both the euro area and the EU. The German economy grew in the last quarter at a slower pace than expected, of 0.4%, while the annual growth was 4%. Economic sentiment in the EU improved to 29.5 in February according to the Survey conducted by the Centre for European Economic Research. Markets had anticipated a substantial surge to 31.3, improving over January's survey result of 25.4. Euro zone is still confronting a spreading of debt fears. Finance ministers gathered on Monday managed to agree only on the permanent mechanism starting 2013, that would total 500 billion euros, but there was no news about the current rescue fund. Retail sales figures pushed back the dollar against the yen, falling below 83.70 JPY from a high of 83.91 JPY, but soon started to recover and was trading at 83.79 JPY, up 0.58%. The British pound went up against the dollar and the euro as Bank of England Governor Mervyn King held a hawkish outlook for inflation that reached 4% in January, according to expectations. The markets are now waiting for a rate increase helping the sterling to gain ground. The British pound was up 0.75% at 1.6153 USD, after reaching a high of 1.6170 USD and reached a four-week high against the euro. The euro fell as low as 83.66 pence, down 0.5%.

Euro up on Asian trading, sterling down after inflation report

Strong Asian buying pushed brought steady gains for the euro against the dollar, while sterling continues to rise on expectations of a rate hike. The euro was up 0.32%, at 1.3532 USD, after reaching a high of 1.3570 USD, following heavy Asian buying, after returning debt fears had pushed the single currency downwards from its January-February rally. Conclusions regarding the strengthening of the euro zone rescue fund (EFSF) that won’t be reached until end of March, less hawkish comments coming from ECB that dashed expectations of a near term rate increase and the resignation of Axel Weber as president of Bundesbank that got him out of the candidacy list to replace Trichet as head of European Central Bank in October have all put pressure on the euro. The dollar index, which tracks the greenback’s value against a basket of other major currencies, was down 0.21%, at 78.41. Against the Japanese yen the dollar had been supported by high US bond yields, but the dollar started to loose ground and was down 0.16%, at 83.62 USD. The sterling extended its gains against the dollar, after high January inflation rate of 4%, increased expectations of a rate hike. The British pound reached a high of 1.6185 USD, but fell broadly after the inflation report, trading at 1.6077 USD, down 0.28%. The Australian dollar and New Zealand dollar fell after rating agency Moody’s put on review At the countries' banks for a possible downgrade, but soon started to recover. The Aussie was up 0.42%, trading at 1.006 USD, while the Kiwi won 0.30%, to 63.12 USD.