European Session – Euro boosted by upbeat GDP, pound hits new 3-year high
February 14, 2014 2:30 pm
The euro and the sterling were the best performers during the week, rallying against a broadly weaker dollar which came under pressure as a result of soft US data this week.
The dollar only got temporary relief earlier in the week following new Fed Chair Janet Yellen’s testimony at a Congressional sub-committee hearing in which she signaled continuity in the Fed’s tapering of the bond buying program. A series of disappointing releases on US retail sales and jobless claims numbers on Thursday gave a blow to the greenback. These soft data added to the dismal nonfarm payrolls report of the last two months.
The release of better- than- expected GDP data from France and Germany today helped boost risk appetite for the euro and the pound, which in turn further pressured the dollar. The Eurozone grew by 0.3% in the fourth quarter compared to 0.1% growth in the third quarter. If recovery in the Eurozone economy gains momentum, this will help reduce expectations that the ECB will cut interest rates.
The euro rallied to a 3-week high against the dollar, breaching the key 1.37 level to hit as high as 1.3713, moving off a mid-week low of 1.3561. During the European session, the euro gained 0.10% versus the dollar to 1.3691 and was up 0.17% against the yen to 139.44.
Sterling had a great performance after surging to a fresh 3-year high against the dollar to peak at 1.6722 today. This was its strongest level since May 2011. The pound gained 0.34% to 1.6707 during the European session.
Helping the pound rally was the Bank of England’s upbeat outlook on the UK economy following the release of its quarterly inflation report on Wednesday. The BoE sharply revised its growth forecast for 2014 to 3.4%, up from a previous estimate of 2.8% and this raised speculation that the Bank of England will raise rates sooner than thought.
The dollar broke below the key 102 yen level and was down about 0.3% on the day at 101.84. Important data for the dollar will be the upcoming University of Michigan consumer sentiment report as well as US industrial production figures.
The Australian dollar managed to recover some losses made following disappointing Australian employment data from yesterday. China inflation data today helped buoy the aussie, as it rose back above 90 US cents to end the European session at 90.20 with a 0.34% gain. China is Australia’s major trade partner so any upbeat data from China is important for the Australian currency.
The euro and the sterling were the best performers during the week, rallying against a broadly weaker dollar which came under pressure as a result of soft US data this week.
The dollar only got temporary relief earlier in the week following new Fed Chair Janet Yellen’s testimony at a Congressional sub-committee hearing in which she signaled continuity in the Fed’s tapering of the bond buying program. A series of disappointing releases on US retail sales and jobless claims numbers on Thursday gave a blow to the greenback. These soft data added to the dismal nonfarm payrolls report of the last two months.
The release of better- than- expected GDP data from France and Germany today helped boost risk appetite for the euro and the pound, which in turn further pressured the dollar. The Eurozone grew by 0.3% in the fourth quarter compared to 0.1% growth in the third quarter. If recovery in the Eurozone economy gains momentum, this will help reduce expectations that the ECB will cut interest rates.
The euro rallied to a 3-week high against the dollar, breaching the key 1.37 level to hit as high as 1.3713, moving off a mid-week low of 1.3561. During the European session, the euro gained 0.10% versus the dollar to 1.3691 and was up 0.17% against the yen to 139.44.
Sterling had a great performance after surging to a fresh 3-year high against the dollar to peak at 1.6722 today. This was its strongest level since May 2011. The pound gained 0.34% to 1.6707 during the European session.
Helping the pound rally was the Bank of England’s upbeat outlook on the UK economy following the release of its quarterly inflation report on Wednesday. The BoE sharply revised its growth forecast for 2014 to 3.4%, up from a previous estimate of 2.8% and this raised speculation that the Bank of England will raise rates sooner than thought.
The dollar broke below the key 102 yen level and was down about 0.3% on the day at 101.84. Important data for the dollar will be the upcoming University of Michigan consumer sentiment report as well as US industrial production figures.
The Australian dollar managed to recover some losses made following disappointing Australian employment data from yesterday. China inflation data today helped buoy the aussie, as it rose back above 90 US cents to end the European session at 90.20 with a 0.34% gain. China is Australia’s major trade partner so any upbeat data from China is important for the Australian currency.
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