Many European markets were closed for holiday on Monday. The Dollar traded tightly near a six-week peak against the Euro and a three-month high versus the Yen on Monday as markets concluded that last Friday’s weak US housing data did little to help expectations of a Federal Reserve interest rate cut. On Monday, European market activity has been thin due to public holiday in Germany, Switzerland and Britain, while US markets were also quiet, as expected, due to the Memorial Day holiday. The US Treasury is expected to release this week its twice-annual report on currencies, which investors will (more…)
The Dollar slipped against the Euro on Tuesday, as comments by European Central Bank officials suggesting more Euro-zone rate increases prompted investors to book profits on recent Dollar gains. But the Dollar pared losses after a May US Consumer Confidence report showed a higher inflation outlook for the next 12 months, resulting in diminished expectations for interest rate cuts by the Federal Reserve. The Yen edged higher on Tuesday after China said it would raise a stamp duty on stocks in a bid to slow equity market gains, prompting concerns about risky trades financed by borrowing in the (more…)
The Japanese currency firmed marginally on Friday after China widened the Yuan’s band against the US Dollar, with investors expecting this move would do little to speed up the pace of the Chinese currency’s rise. The Yen, Asia’s most liquid currency, which often trades as a proxy for the tightly controlled Yuan, initially jumped after China said it would allow the Yuan to rise or fall 0.5% against the Dollar daily, up from 0.3% in the current trading band. China’s move, which also included a rise in interest rates to slow economic growth, came ahead of a meeting between US Treasury Henry Pauls (more…)
The Dollar fell on Wednesday after Minutes of Bank of England Policy Meeting and strong data on Euro-zone industrial Orders suggested interest rates in Europe could rise more than previously thought. The GBP surged against the Dollar after the BoE minutes showed that, contrary to expectations, the Central Bank’s decision to raise rates this month was unanimous, and some members even had considered a half 0.5% rise. The market continues to price in two more 0.25% rate hikes from the European Central Bank this year, to 4.25%, but the chances of further hikes are rising. (more…)
