2013-03-19 14:16 European Session – Sterling bounces after UK inflation data
March 19, 2013 2:16 pm
Currency markets were calmer today with most currency pairs consolidating in yesterday’s ranges after a shock sell-off early Monday ignited by renewed euro zone debt crisis concerns.
The bias is will for a stronger dollar which was supported by stronger US new home construction data today. New building permits were given to start construction on 917,000 homes at an annual rate, up 0.8 percent from a revised 910,000 pace in January that was higher than initially estimated.
EURUSD continued trading sideways in yesterday’s range, between $1.2915 and $1.2968. Fundamental data out of Europe today was weak.
New car registration dropped 10.5 percent, while construction output fell by 1.4 percent m/m. The European economic sentiment index by ZEW declined to 33.4 (though German ZEW indicated an increase to 48.5)
Sterling rose against the dollar UK inflation data showed inflationary pressures are building. Inflation rose to a nine-month high in February, giving less leeway to the Bank of England to ease monetary policy further to stimulate the economy.
GBPUSD is up 0.1 percent since Monday’s close of $1.5092, but is still trading within Monday’s range. Tomorrow’s BoE minutes are in focus.EURGBP fell to 0.8551 from 0.8585 after the UK inflation data.
Yen is still weak after dollar’s sharp rebound late yesterday. There really is no fundamentally redeeming safe haven lure to yen especially since the Bank of Japan is expected to embark on bolder monetary easing measures as the new governor Kuroda takes over as of today.
USDJPY eased of the intraday high of 95.72 hit in Asia but still above today’s open price and is currently trading around 95.40 going into the US session.
EURJPY has also stabilized after yesterday’s sharp drop and has since filled Monday’s opening gap and is currently trading around 123.50 yen.
Focus will turn to the Federal Reserve policy meeting which begins today and ends on Wednesday. The meeting will create some nervousness considering the FOMC has no intention of slowing down or ending its ultra-loose monetary policy anytime soon, despite continued pick-up in US economic activity.
Currency markets were calmer today with most currency pairs consolidating in yesterday’s ranges after a shock sell-off early Monday ignited by renewed euro zone debt crisis concerns.
The bias is will for a stronger dollar which was supported by stronger US new home construction data today. New building permits were given to start construction on 917,000 homes at an annual rate, up 0.8 percent from a revised 910,000 pace in January that was higher than initially estimated.
EURUSD continued trading sideways in yesterday’s range, between $1.2915 and $1.2968. Fundamental data out of Europe today was weak.
New car registration dropped 10.5 percent, while construction output fell by 1.4 percent m/m. The European economic sentiment index by ZEW declined to 33.4 (though German ZEW indicated an increase to 48.5)
Sterling rose against the dollar UK inflation data showed inflationary pressures are building. Inflation rose to a nine-month high in February, giving less leeway to the Bank of England to ease monetary policy further to stimulate the economy.
GBPUSD is up 0.1 percent since Monday’s close of $1.5092, but is still trading within Monday’s range. Tomorrow’s BoE minutes are in focus.EURGBP fell to 0.8551 from 0.8585 after the UK inflation data.
Yen is still weak after dollar’s sharp rebound late yesterday. There really is no fundamentally redeeming safe haven lure to yen especially since the Bank of Japan is expected to embark on bolder monetary easing measures as the new governor Kuroda takes over as of today.
USDJPY eased of the intraday high of 95.72 hit in Asia but still above today’s open price and is currently trading around 95.40 going into the US session.
EURJPY has also stabilized after yesterday’s sharp drop and has since filled Monday’s opening gap and is currently trading around 123.50 yen.
Focus will turn to the Federal Reserve policy meeting which begins today and ends on Wednesday. The meeting will create some nervousness considering the FOMC has no intention of slowing down or ending its ultra-loose monetary policy anytime soon, despite continued pick-up in US economic activity.
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