• Investors Eye Economic Releases
  • Investors Eye Economic Releases

    David Sumner | 12:20 | 25/12/13
    The British Pound edged higher against the greenback on Monday as U.S. consumer confidence posted lower than expected, but the Dollar rebounded on Tuesday in anticipation of ...

The British Pound edged higher against the greenback on Monday as U.S. consumer confidence posted lower than expected, but the Dollar rebounded on Tuesday in anticipation of fundamental economic reports anticipated to show further economic improvement.

Current Account Falls

The British Pound gained against the U.S. Dollar even as money market investors squared off their positions to retrieve gains before the Christmas Holiday. The markets closed at noon, but the Sterling remained supported by prior reports showing progress in the employment sector. The metrics bolstered the Pound by 0.2 percent for the week. The British currency’s climb was limited due to the strengthening of the DX and by an announcement indicating that the U.K.’s current account dropped by 20.7 billion Pounds in the third quarter. However, gross domestic product showed that the British economy expanded by 0.8 percent. The Sterling dipped versus the Euro and rallied against the Yen.

Aussie Eases Further

Australia’s Dollar continued to weaken versus its U.S. peer while Forex market traders sought out the dollar as a safe harbor ahead of the holiday break. The Aussie depreciated as the currency has consolidated, and as a result of comments by the central bank’s governor, Glenn Stevens who believes that a weaker monetary unit will help bolster the country’s economy. But it’s these comments what has caused Japanese money managers to slow down their purchase of Australian bonds. Analysts believe that the attempt to debase the currency could impact demand from Japanese investors. The Ministry of Tokyo revealed that speculators purchased 129.9 billion Yen in government assets in the month of October, the most in over one year. The Aussie regained some of its losses in the last few days when the U.S. Dollar fell, and it’s managing to stay away from the prior three-year lows as the greenback hasn’t strengthened further.

BOJ Issues Monthly Report

The Euro continued to gain against the Yen as the latter fell subsequent to the release of the Bank of Japan’s monthly report. The bank’s report shows that further easing is a likely possibility; however, it did not include the word “deflation,” something that hasn’t happened in four years. The cabinet provided a positive review of the economy despite recent data which suggests progress has slowed down. The cabinet added that private consumption has increased and the recovery will continue at “a moderate pace.”

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