The Pound edged away from the four-year high it reached against the US Dollar over the weekend as investors embarked on a bout of profit taking.
With the US markets closed for the President’s Day holiday there was a distinct lack of key data releases and as such Monday proved to be a slow news day.
The Dollar remained under pressure from last week’s data releases which showed that factory output in the world’s largest economy fell unexpectedly in the first month of the year. The disappointing data weighed upon the currency as it created speculation that the Federal Reserve may consider slowing the pace of the cuts it is making to its monetary easing policy.
Against the Euro the US Dollar slumped to a three-week low after the Eurozone continued to find support from last week’s better-than-expected economic growth data. The data showed that the Eurozone economy expanded by 0.3% in the final quarter of 2013 and by 0.5% from the previous year.
Against the Japanese Yen the ‘Greenback’ firmed to a session high in the afternoon after regaining ground following the release of data which showed that the Japanese economy expanded far less than economists had been forecasting. Gross domestic product in the Asian country expanded by just 0.3% in the final quarter of 2013 and by 1% on a year by year basis. Economists had been predicting rises of 0.7% and 2.8% respectively.
The Australian Dollar firmed to a one-month high and the New Zealand Dollar also firmed after a report out of China buoyed demand in riskier assets. The Chinese data also improved the outlook for the struggling emerging market currencies.
Key events for the US Dollar:
Wednesday 19th February – FOMC Minutes
Thursday 20th February – US Core inflation Index
Friday 21st February – Home Sales
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5982 ,
US Dollar,,Euro,0.7297,
US Dollar,,Canadian Dollar,1.0961,
US Dollar,,Australian Dollar,1.1073 ,
Pound Sterling,,US Dollar,1.6712 ,
[/table]
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