The Euro remained lower ahead of German unemployment and CPI figures. Economists expect the unemployment to remain steady at 6.5% while the year-on-year inflation rate is forecast to slip into negative territory for the first time since September 2009. Any disappointing data may send the currency lower despite offering little for forward looking policy bets. The Euro was little moved at $1.1285 but stood well below Tuesday’s high of $1.1409. Against its Japanese peer, it added 0.2% to 132.8014 Yen.
Sterling tumbled from the 1-week high hit yesterday amid a lack of major market-moving data for the UK. The Pound was down 0.1% to $1.5133 after reaching $1.5216 on Wednesday, the strongest since Jan.16. Against the 19-nation currency, it was faintly up at 1.3425 Euro, 0.5% from the 7-year high hit on Monday. It added 0.3% to 178.3812 Yen.
The U.S Dollar extended its gains after the Federal Reserve reiterated that it would remain “patient” in deciding when to raise interest rates, while acknowledging that inflation may decline further. The Fed also said the world’s largest economy was expanding “at a solid pace” with strong job gains keeping intact expectations that it will raise interest rates from the middle of this year. The Fed’s optimism and hawkish tone stand in sharp contrast to many of its counterparts, namely the ECB which launched an economic stimulus last week; the Bank of Canada which cut its interest rate; Singapore where there was a rate cut no later than yesterday and the RBNZ which abandoned its bias to raise interest rates. The Greenback inched 0.2% to 117.6889 Yen. Against the single currency, it traded little changed at $1.1285 per Euro, well below Tuesday’s trough of $1.1409.
Around the world
The Yen remained lower versus the U.S Dollar amid month-end buying by Japanese importers. Japan’s currency fell as much as 0.5% before trading at 117.6889 per Dollar, still down 0.2% from late U.S trades, gaining support on a report from the Ministry of Economy, Trade and Industry which showed retail sales rose for a sixth straight month in December, providing evidence of a gradual recovery in private consumption. Against the common currency, it depreciated 0.2% to 132.8014 per Euro.
Meanwhile, Australia’s Dollar plunged back below the $0.79 following reports the RBA is considering a rate cut. The so-called Aussie hovered near the 5-1/2 year low of $0.7860 hit on Monday and last fetching $0.7868, down 0.45% from late U.S hours. The move followed media reports stating the RBA would cut the benchmark rate next week or at least signal the possibility of rate cuts this year. It skidded 0.2% to 69.84 Euro cents. Against Japan’s currency, it fell 0.3% to 92.4975 Yen, moving towards the 10-month trough of 92.3719 Yen hit earlier this week.
New Zealand’s Dollar dropped to a fresh 4-year low versus the U.S Dollar after the Reserve Bank opened doors to a possible rate cut. RBNZ Governor Graeme Wheeler kept the official cash rate unchanged as expected but surprised markets by saying the next adjustment could be down. He also reiterated that the currency was unjustifiably high and its level was unsustainable. The Kiwi plunged 0.3% to $0.7302, a level unseen since March 2011, having depreciated as much as 1.9% yesterday. It slid 0.2% to 64.72 Euro cents, the weakest level in 3 weeks. Against its Japanese peer, it added 0.1% to 86.0549 Yen but remained within reach of the 3-month trough of 85.9425 Yen hit earlier today.