The euro has fallen to a one-week low versus a broadly firmer U.S. dollar this morning, as traders cut back on speculative short positions in the greenback ahead of the release of latest FOMC minutes later today.
The euro fell back to $1.3786 , its lowest level since October 5, pulling back further from an eight-month high of $1.4030 hit last week.
Stop losses were taken out below this level and that helped to accentuate the move down. Although momentum has slowed later this morning the technical picture still looks quite bullish with most investment houses still recommending buying the dips and keeping long overall.
Sterling has fallen to the day’s low against the dollar today after data showed UK inflation rose in line with expectations while the UK trade balance narrowed a little less than expected. Some currency market participants were expecting a higher figure this morning. If the CPI figures continue to show a loss of momentum without any rise in interest rates it could possibly re-enforce the governor’s prediction for a natural decline in CPI inflation.
British consumer price inflation held steady at 3.1 percent as expected in September as a drop in transport costs offset a record jump in clothing prices and higher food inflation, official data showed on Tuesday. The pound has lost gradual value against most of the 13 most actively traded currencies due to this.
