By: DailyForex.com
The U.S. Dollar got a lift from unexpectedly upbeat economic news from the U.S. which reinforced investors’ expectations that the Fed will continue to whittle away its stimulus program. The Fed had recently indicated that it would begin curtailing its monthly bond purchases by $10 billion beginning in this month, and said that future additional curtailments would depend on the influx of supportive economic data. According to yesterday’s data release, factory activity in the United States remained close to a 2½ year peak last month, and the numbers of individuals who filed for unemployment relief fell again over the past week; together, the data highlighted the steady improvement in the U.S. economy.
As reported at 11:48 a.m. (JST) in Tokyo, the U.S. Dollar Index traded at 80.607 .DXY, slipping from a 2-week high of 80.709 .DXY; the U.S. Dollar Index is used by traders to assess the greenback’s relative strength against major rivals. The USD/JPY traded at 104.80 Yen, edging off yesterday’s 5-year peak of 105.45 Yen while the EUR/JPY edging 0.1% lower to 143.15 Yen, moving away from last Friday’s 5-year peak set at 145.67 Yen. Currency strategists don’t expect that the Yen’s slight bounce will be enduring as they attribute it primarily to thin trade.
Eurozone Banks Prepare for Quality Review
In the Eurozone, the EUR/USD pair dipped to $1.3658, a loss of 0.1% but not far from yesterday’s 2-week trough of $1.3630; last week, the pair hit a 2-year peak at $1.3894. Despite thin trade, the Euro has gotten support from the repatriation of Euros in advance of an ECB banking system audit which could otherwise have found some banks’ capital bases lacking.