European Session – Sterling deflated as Carney lessens likelihood of early rate hike
January 24, 2014 2:42 pm
Despite the lack of data, there was volatility in the currency markets today. The euro and the pound did well in the first half of the European session before giving up gains against the dollar. The yen retained its strength mainly due to safe haven flows as risk sentiment was still down following a series of weak data out of the US and China on Thursday.
The euro was unable to remain above the key 1.36 level which it breached yesterday after upbeat Eurozone PMI data. The single currency gave up much of its gains versus the dollar but managed to end the session in positive territory with a 0.06% gain to 1.3689.
Monday will be an important day for the euro as German retail sales data are due for release. Also Germany’s Ifo business climate index will be published.
Sterling marked its fifth straight day of gains against the dollar and rose to an almost three-year high during the London session before tumbling 100 pips as Bank of England Governor Mark Carney began speaking at the Davos World Economic Forum.
Carney said that headwinds to UK growth will persist for a while and any future rate increases would be gradual. He added that the 7% unemployment threshold would not trigger consideration of a rate hike.
The pound dropped to a low of 1.6494 from a high of 1.6667, almost erasing all gains made after being boosted by Wednesday’s upbeat UK employment data. Cable ended down 0.55% to 1.6528.
Japan’s Nikkei share average dropped to a 1-month low as the yen rose. The dollar dropped from the European session open of 103.35 and broke below the key 102.00 level which proved to be strong support since the pair bounced back up to end the session at 102.49 with a 0.83% loss. The euro dipped to a low of 139.82 yen and ended the session with a 0.77% loss at 140.30.
Despite the lack of data, there was volatility in the currency markets today. The euro and the pound did well in the first half of the European session before giving up gains against the dollar. The yen retained its strength mainly due to safe haven flows as risk sentiment was still down following a series of weak data out of the US and China on Thursday.
The euro was unable to remain above the key 1.36 level which it breached yesterday after upbeat Eurozone PMI data. The single currency gave up much of its gains versus the dollar but managed to end the session in positive territory with a 0.06% gain to 1.3689.
Monday will be an important day for the euro as German retail sales data are due for release. Also Germany’s Ifo business climate index will be published.
Sterling marked its fifth straight day of gains against the dollar and rose to an almost three-year high during the London session before tumbling 100 pips as Bank of England Governor Mark Carney began speaking at the Davos World Economic Forum.
Carney said that headwinds to UK growth will persist for a while and any future rate increases would be gradual. He added that the 7% unemployment threshold would not trigger consideration of a rate hike.
The pound dropped to a low of 1.6494 from a high of 1.6667, almost erasing all gains made after being boosted by Wednesday’s upbeat UK employment data. Cable ended down 0.55% to 1.6528.
Japan’s Nikkei share average dropped to a 1-month low as the yen rose. The dollar dropped from the European session open of 103.35 and broke below the key 102.00 level which proved to be strong support since the pair bounced back up to end the session at 102.49 with a 0.83% loss. The euro dipped to a low of 139.82 yen and ended the session with a 0.77% loss at 140.30.
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