Asian Session – Dollar remains under pressure, sterling hits 4-year high
February 17, 2014 8:08 am
Japan’s GDP data were the main focus of the Asian session on Monday. The Japanese economy grew at a slower pace in the fourth quarter, at an annualized 1% versus a 2.8% expected. Third quarter GDP was at 1.1%.The weaker-than-expected figure initially dampened risk appetite and caused a drop in Tokyo’s Nikkei, which initially lifted the yen.
Risk aversion coupled with broad dollar weakness, pressured the dollar/yen pair to a low of 101.37 from Friday’s close of 101.78. The dollar has been weighed down recently due to a series of disappointing US economic data last week.
On Friday, data showed that January’s manufacturing output fell by the most in 4 ½ years while a retail sales report on Thursday showed a decline of 0.4% in January after a revised 0.1% drop in December. While the recent poor data was blamed on bad weather, any upcoming weak US data will likely have more of an impact on the dollar as concerns over the health of the US economic recovery will come to the fore, and in turn raise speculation about the pace of tapering.
By the end of the session, the dollar bounced back against the yen to end the Asian session at 101.61 with just a 0.02% loss.
The British pound continues to stand out as the best performing G10 currency and extended gains versus the dollar today to reach a new 4 – year high. A series of stronger UK data is helping raise expectations that the Bank of England will raise rates sooner than thought. Today’s upbeat Rightmove Plc House Price Index further increased the positive sentiment towards the pound, lifting it to 1.6821, the highest level since November 2009. Cable ended the session with a 0.14% gain at 1.6789.
The euro gained 0.04% against the dollar after hitting a 3-week high of 1.3723. General sentiment on the euro is currently positive following some upbeat data out of the Eurozone, particularly Friday’s Q4 GDP data from France and Germany. So far, political issues in Italy, following the resignation of Prime Minister Letta, have not impacted the euro. Developments regarding this will be closely watched.
The Australian dollar is being buoyed by strong data out of China recently. China is Australia’s major trading partner. The aussie hit an early Asian high of 0.9068, compared to Friday’s high of 0.9042, before ending the session at 0.9052.
Japan’s GDP data were the main focus of the Asian session on Monday. The Japanese economy grew at a slower pace in the fourth quarter, at an annualized 1% versus a 2.8% expected. Third quarter GDP was at 1.1%.The weaker-than-expected figure initially dampened risk appetite and caused a drop in Tokyo’s Nikkei, which initially lifted the yen.
Risk aversion coupled with broad dollar weakness, pressured the dollar/yen pair to a low of 101.37 from Friday’s close of 101.78. The dollar has been weighed down recently due to a series of disappointing US economic data last week.
On Friday, data showed that January’s manufacturing output fell by the most in 4 ½ years while a retail sales report on Thursday showed a decline of 0.4% in January after a revised 0.1% drop in December. While the recent poor data was blamed on bad weather, any upcoming weak US data will likely have more of an impact on the dollar as concerns over the health of the US economic recovery will come to the fore, and in turn raise speculation about the pace of tapering.
By the end of the session, the dollar bounced back against the yen to end the Asian session at 101.61 with just a 0.02% loss.
The British pound continues to stand out as the best performing G10 currency and extended gains versus the dollar today to reach a new 4 – year high. A series of stronger UK data is helping raise expectations that the Bank of England will raise rates sooner than thought. Today’s upbeat Rightmove Plc House Price Index further increased the positive sentiment towards the pound, lifting it to 1.6821, the highest level since November 2009. Cable ended the session with a 0.14% gain at 1.6789.
The euro gained 0.04% against the dollar after hitting a 3-week high of 1.3723. General sentiment on the euro is currently positive following some upbeat data out of the Eurozone, particularly Friday’s Q4 GDP data from France and Germany. So far, political issues in Italy, following the resignation of Prime Minister Letta, have not impacted the euro. Developments regarding this will be closely watched.
The Australian dollar is being buoyed by strong data out of China recently. China is Australia’s major trading partner. The aussie hit an early Asian high of 0.9068, compared to Friday’s high of 0.9042, before ending the session at 0.9052.
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