The dollar extended Thursday’s gains into Friday as markets try to decide how to price earlier QE tapering talk. Fed Chairman Ben Bernanke said on Wednesday that monetary stimulus programs, which weaken the dollar to spur recovery, may be scaled back this year if the economy continues to improve.
With no U.S. data due for release today, most of the action was in the euro, which came under pressure after the European Central Bank said its current account surplus narrowed to EUR 19.5 billion in April, from a surplus of EUR 25.9 billion, confounding expectations for the surplus to narrow to EUR 14.2 billion.
The dollar was also stronger against the pound after official data showed that Government borrowing rose slightly in 2012-13 compared with the previous year. Figures from the Office for National Statistics show underlying public sector borrowing was £118.8bn, up from £118.5bn in 2011-12. The rise comes as a result of the ONS revising down its 2011-12 borrowing figure by £2.4bn to £118.5bn.
In U.S. trading on Friday, EUR/USD was down 0.73% at 1.3123, up from a session low of 1.3116 and off from a high of 1.3254. GBP/USD was down 0.45% at 1.5439, off from a session high of 1.5532.
More Coverage of the Day’s Top Story
FT: Dollar gains as EM currencies suffer. – The U.S. dollar gained further ground at the end of a turbulent week in foreign exchange markets during which emerging market currencies bore the brunt of the selling.
FT: Forget the Fed – it’s the ECB that should worry investors. Investors have been heading for the hills over the U.S. Federal Reserve’s warning that it may soon rein in its ultra-loose monetary policy. They may be worrying about the wrong central bank. An exit from crisis-era measures will be tricky everywhere. But most central bankers and their political masters have a clear idea of what normality they wish to return to. Not so the European Central Bank. For the euro area, it could get ugly.
Marc Chandler: Fragile markets trying to stabilize ahead of weekend. – A somewhat calmer tone has emerged in the global capital markets, encouraged more, it appears, by position adjusting ahead of the weekend, rather new fundamental developments.
More Top Stories:
The Australian: Australian dollar’s plunge likely to continue. – With global investors anticipating the start of the US central bank’s removal of economic stimulus before the end of the year, a move to US90c can be expected in coming weeks, analysts said.
New Zealand Herald: NZ dollar tumbles below US78c. – The New Zealand dollar fell to a 12-month low as the Federal Reserve’s signal of an end to quantitative easing, weak Chinese manufacturing and tighter credit sapped risk appetite and sent investors rushing to the greenback.
WSJ: Gold bounces off recent lows. – Gold prices rebounded from September 2010 lows as bargain hunters in Asia briefly lifted prices above $1,300 an ounce.
Bloomberg: Dollar index gains for 3rd day as Fed policy shift spurs demand. – The Dollar Index rose for a third day, surging after Federal Reserve Chairman Ben S. Bernanke made the case for reducing stimulus as the economy improves, sparking declines in emerging-market assets and commodities.
Future Currency Forecast: USD/JPY exchange rates. – ‘Greenback’ set to make biggest gains in two months. – The U.S. Dollar has strengthened against the majority of its peers and is heading for its biggest weekly gain in two months against the Japanese Yen, after having soared after Federal Reserve Governor Ben Bernanke made the case for monetary stimulus to be withdrawn as the US economy improves.
Investing.com: Gold inches up amid bargain hunting after Fed-fueled selloff. – Gold prices rose on Friday, edging up from lows not seen since September of 2010 after a manufacturing gauge for the Philadelphia area of the U.S. beat expectations and strengthened the dollar, which tends to trade inversely with gold.
Investing.com: USD/CAD gains on soft Canadian inflation, retail sales data. – The Canadian dollar tumbled Friday to its lowest level in a year Friday as the U.S. dollar continued to appreciate and traders digested data on retail sales and inflation.
Investing.com: GBP/USD trims losses, but remains under pressure. – The pound trimmed losses against the U.S. dollar on Thursday, but remained under pressure after the release of mixed U.S. data as Wednesday’s comments by Federal Reserve Chairman Ben Bernanke continued to support the greenback.
With no U.S. data due for release today, most of the action was in the euro, which came under pressure after the European Central Bank said its current account surplus narrowed to EUR 19.5 billion in April, from a surplus of EUR 25.9 billion, confounding expectations for the surplus to narrow to EUR 14.2 billion.
The dollar was also stronger against the pound after official data showed that Government borrowing rose slightly in 2012-13 compared with the previous year. Figures from the Office for National Statistics show underlying public sector borrowing was £118.8bn, up from £118.5bn in 2011-12. The rise comes as a result of the ONS revising down its 2011-12 borrowing figure by £2.4bn to £118.5bn.
In U.S. trading on Friday, EUR/USD was down 0.73% at 1.3123, up from a session low of 1.3116 and off from a high of 1.3254. GBP/USD was down 0.45% at 1.5439, off from a session high of 1.5532.
More Coverage of the Day’s Top Story
FT: Dollar gains as EM currencies suffer. – The U.S. dollar gained further ground at the end of a turbulent week in foreign exchange markets during which emerging market currencies bore the brunt of the selling.
FT: Forget the Fed – it’s the ECB that should worry investors. Investors have been heading for the hills over the U.S. Federal Reserve’s warning that it may soon rein in its ultra-loose monetary policy. They may be worrying about the wrong central bank. An exit from crisis-era measures will be tricky everywhere. But most central bankers and their political masters have a clear idea of what normality they wish to return to. Not so the European Central Bank. For the euro area, it could get ugly.
Marc Chandler: Fragile markets trying to stabilize ahead of weekend. – A somewhat calmer tone has emerged in the global capital markets, encouraged more, it appears, by position adjusting ahead of the weekend, rather new fundamental developments.
More Top Stories:
The Australian: Australian dollar’s plunge likely to continue. – With global investors anticipating the start of the US central bank’s removal of economic stimulus before the end of the year, a move to US90c can be expected in coming weeks, analysts said.
New Zealand Herald: NZ dollar tumbles below US78c. – The New Zealand dollar fell to a 12-month low as the Federal Reserve’s signal of an end to quantitative easing, weak Chinese manufacturing and tighter credit sapped risk appetite and sent investors rushing to the greenback.
WSJ: Gold bounces off recent lows. – Gold prices rebounded from September 2010 lows as bargain hunters in Asia briefly lifted prices above $1,300 an ounce.
Bloomberg: Dollar index gains for 3rd day as Fed policy shift spurs demand. – The Dollar Index rose for a third day, surging after Federal Reserve Chairman Ben S. Bernanke made the case for reducing stimulus as the economy improves, sparking declines in emerging-market assets and commodities.
Future Currency Forecast: USD/JPY exchange rates. – ‘Greenback’ set to make biggest gains in two months. – The U.S. Dollar has strengthened against the majority of its peers and is heading for its biggest weekly gain in two months against the Japanese Yen, after having soared after Federal Reserve Governor Ben Bernanke made the case for monetary stimulus to be withdrawn as the US economy improves.
Investing.com: Gold inches up amid bargain hunting after Fed-fueled selloff. – Gold prices rose on Friday, edging up from lows not seen since September of 2010 after a manufacturing gauge for the Philadelphia area of the U.S. beat expectations and strengthened the dollar, which tends to trade inversely with gold.
Investing.com: USD/CAD gains on soft Canadian inflation, retail sales data. – The Canadian dollar tumbled Friday to its lowest level in a year Friday as the U.S. dollar continued to appreciate and traders digested data on retail sales and inflation.
Investing.com: GBP/USD trims losses, but remains under pressure. – The pound trimmed losses against the U.S. dollar on Thursday, but remained under pressure after the release of mixed U.S. data as Wednesday’s comments by Federal Reserve Chairman Ben Bernanke continued to support the greenback.
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