European Session – Euro rallies after German finance minister says rates too low
March 12, 2014 2:42 pm
News of China’s first bond default dampened risk sentiment in markets today, including currencies. The broad risk-off tone led to a demand of safe haven assets which helped strengthen the yen.
The only economic data of note today was Eurozone industrial output. The data was mixed and did not really impact the euro. On an annual basis, industrial output rose faster than expected in January at 2.1% while on a month-to-month basis, output fell 0.2% in January from December, contrary to a 0.6% increase expected.
Despite the data, the euro was quite resilient and bullish sentiment for the currency was strong. Comments from Germany’s finance minister Wolfgang Schaeuble helped the euro spike against the dollar to above 1.3900. Schaeuble said that interest rates are too low from a German point of view and he doesn’t see a danger of deflation in the Euro- region.
The euro briefly hit a session high of 1.3904 before ending at 1.3893 with a 0.27% gain versus the dollar.
Lack of data out of the United Kingdom today meant the sterling drifted lower against the dollar. Meanwhile the Bank of England’s Deputy Governor Charles Bean reiterated the Bank’s stance that there is no urgency for raising interest rates. This helped weigh on the pound.
Sterling dipped to as low as 1.6567 before steadying at 1.6617 to end the session down 0.08% against the dollar. Friday’s UK trade and construction data will come into focus and give more direction for the pound.
The yen was strong today as a result of safe haven demand on the back of China-related global growth concerns which impacted risk appetite. Dollar/yen was down 0.24% at 102.96 while pound/yen was one of the worst performing yen pairs, losing 0.30% to trade at 170.60.
The Australian dollar was impacted negatively by the concerns over China, as well as by softer domestic investment and household lending data. Focus will now be on the upcoming Australian employment release.
The aussie has fallen 1.7% since Friday and touched as low as 0.8923 today, before ending in Europe at 0.8957.
The US calendar does not have any key releases today and so the session is expected to be relatively quiet.
News of China’s first bond default dampened risk sentiment in markets today, including currencies. The broad risk-off tone led to a demand of safe haven assets which helped strengthen the yen.
The only economic data of note today was Eurozone industrial output. The data was mixed and did not really impact the euro. On an annual basis, industrial output rose faster than expected in January at 2.1% while on a month-to-month basis, output fell 0.2% in January from December, contrary to a 0.6% increase expected.
Despite the data, the euro was quite resilient and bullish sentiment for the currency was strong. Comments from Germany’s finance minister Wolfgang Schaeuble helped the euro spike against the dollar to above 1.3900. Schaeuble said that interest rates are too low from a German point of view and he doesn’t see a danger of deflation in the Euro- region.
The euro briefly hit a session high of 1.3904 before ending at 1.3893 with a 0.27% gain versus the dollar.
Lack of data out of the United Kingdom today meant the sterling drifted lower against the dollar. Meanwhile the Bank of England’s Deputy Governor Charles Bean reiterated the Bank’s stance that there is no urgency for raising interest rates. This helped weigh on the pound.
Sterling dipped to as low as 1.6567 before steadying at 1.6617 to end the session down 0.08% against the dollar. Friday’s UK trade and construction data will come into focus and give more direction for the pound.
The yen was strong today as a result of safe haven demand on the back of China-related global growth concerns which impacted risk appetite. Dollar/yen was down 0.24% at 102.96 while pound/yen was one of the worst performing yen pairs, losing 0.30% to trade at 170.60.
The Australian dollar was impacted negatively by the concerns over China, as well as by softer domestic investment and household lending data. Focus will now be on the upcoming Australian employment release.
The aussie has fallen 1.7% since Friday and touched as low as 0.8923 today, before ending in Europe at 0.8957.
The US calendar does not have any key releases today and so the session is expected to be relatively quiet.
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