European Session – Dollar strength on Yellen, sterling down on industrial production
October 9, 2013 12:37 pm
The overnight news that President Obama would nominate Janet Yellen to head the Federal Reserve dominated trading, pushing the dollar higher and leading to a rebound in stocks after the previous day’s sharp losses.
According to analysts, although Yellen is a known dove which should in theory hurt the dollar, the fact she was the person to be nominated as Fed chief removed one source of uncertainty regarding US assets. Others questioned whether the dollar rebound would continue in the face of lack of progress to reach a deal to fund the government and extend the debt ceiling.
In economic news, UK Industrial Production for August missed expectations falling 1.1% on the month against expectations of a rise of 0.4%. The data went against the recent evidence of strength in the British economy, causing sterling to fall 0.47% against the dollar, dropping below the 1.60 mark to 1.5964.
In Germany on the other hand, Industrial Production for August rose 1.4% on the month, exceeding expectations of a 1.0% gain. The data did not help the euro to recover against a dollar that was stronger throughout the session.
As a result of dollar strength, gold fell 0.65% to 1309.8.
The Japanese Yen climbed 0.1% against the dollar to reach 97.26, whereas the euro fell to a one-week low of 1.3512, down 0.25%.
The overnight news that President Obama would nominate Janet Yellen to head the Federal Reserve dominated trading, pushing the dollar higher and leading to a rebound in stocks after the previous day’s sharp losses.
According to analysts, although Yellen is a known dove which should in theory hurt the dollar, the fact she was the person to be nominated as Fed chief removed one source of uncertainty regarding US assets. Others questioned whether the dollar rebound would continue in the face of lack of progress to reach a deal to fund the government and extend the debt ceiling.
In economic news, UK Industrial Production for August missed expectations falling 1.1% on the month against expectations of a rise of 0.4%. The data went against the recent evidence of strength in the British economy, causing sterling to fall 0.47% against the dollar, dropping below the 1.60 mark to 1.5964.
In Germany on the other hand, Industrial Production for August rose 1.4% on the month, exceeding expectations of a 1.0% gain. The data did not help the euro to recover against a dollar that was stronger throughout the session.
As a result of dollar strength, gold fell 0.65% to 1309.8.
The Japanese Yen climbed 0.1% against the dollar to reach 97.26, whereas the euro fell to a one-week low of 1.3512, down 0.25%.
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