European Session – Euro tumbles below 1.36 after US data boosts dollar
January 15, 2014 2:22 pm
The dollar was the main driver of major currency pairs today as US data were supportive. The dollar began its move higher after Tuesday’s solid US retail sales data and Fed officials (Plosser and Fisher) talking up the taper. Meanwhile, today’s US PPI release and the US Empire State Manufacturing Index also had a positive impact on the dollar.
The data gave investors enough to regard the overall US growth picture as improving, and offset Friday’s soft nonfarm payrolls.
The euro was one of the worst performers during the European session, falling 0.3% against the dollar to 1.3599. Fundamental news out of the Eurozone today was limited and was not really the real driver behind euro weakness. Further dollar strength following an upbeat Empire State Manufacturing Index sent the euro below the key psychological 1.36 level.
European data was mixed and included a stronger- than – expected Eurozone trade balance and disappointing German GDP data. Growth in Europe’s largest economy expanded by just 0.4% in 2013 after increasing by 0.7% in 2012. Forecasts were for a growth rate of 0.5%. Thursday’s Eurozone CPI data will be a key event for the euro.
Sterling did not take any clear direction during the European session, trading within a 60-point range of 1.6376 and 1.6436. Cable fell late in the session after the US data to end the session with a 0.4% loss at 1.6349.
Immediate event risk for the pound will be Bank of England Governor Carney’s speech in front of the UK Treasury Select Committee on financial stability.
In the longer term the pound is expected to perform well since UK macroeconomic policy is going to plan and inflation data this week showed a slower rate of 2% which is in line with the central bank’s target and should help consumers and economic growth.
The dollar consolidated recent gains against the yen, trading within a 20-pip range with support at 104.20, until the US data pushed the pair above the last high of 104.46 towards the key 104.50 level.The pair ended the session with a 0.07% gain at 104.46.
The release of the Fed’s Beige Book later in the US session will be important for the dollar.
The dollar was the main driver of major currency pairs today as US data were supportive. The dollar began its move higher after Tuesday’s solid US retail sales data and Fed officials (Plosser and Fisher) talking up the taper. Meanwhile, today’s US PPI release and the US Empire State Manufacturing Index also had a positive impact on the dollar.
The data gave investors enough to regard the overall US growth picture as improving, and offset Friday’s soft nonfarm payrolls.
The euro was one of the worst performers during the European session, falling 0.3% against the dollar to 1.3599. Fundamental news out of the Eurozone today was limited and was not really the real driver behind euro weakness. Further dollar strength following an upbeat Empire State Manufacturing Index sent the euro below the key psychological 1.36 level.
European data was mixed and included a stronger- than – expected Eurozone trade balance and disappointing German GDP data. Growth in Europe’s largest economy expanded by just 0.4% in 2013 after increasing by 0.7% in 2012. Forecasts were for a growth rate of 0.5%. Thursday’s Eurozone CPI data will be a key event for the euro.
Sterling did not take any clear direction during the European session, trading within a 60-point range of 1.6376 and 1.6436. Cable fell late in the session after the US data to end the session with a 0.4% loss at 1.6349.
Immediate event risk for the pound will be Bank of England Governor Carney’s speech in front of the UK Treasury Select Committee on financial stability.
In the longer term the pound is expected to perform well since UK macroeconomic policy is going to plan and inflation data this week showed a slower rate of 2% which is in line with the central bank’s target and should help consumers and economic growth.
The dollar consolidated recent gains against the yen, trading within a 20-pip range with support at 104.20, until the US data pushed the pair above the last high of 104.46 towards the key 104.50 level.The pair ended the session with a 0.07% gain at 104.46.
The release of the Fed’s Beige Book later in the US session will be important for the dollar.
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