Market News

As the European Central Bank’s monthly meeting looms, the common currency Euro steadied but held close to a 2-month trough which had been set against the greenback earlier this week.

With emerging markets beginning to stabilize the Japanese Yen eased off of the recently struck multi-month peaks though currency strategists are still hesitant to go long on the USD/JPY pair waiting instead for stronger affirmation that the risk environment has improved.

The U.S. Dollar managed to steady in spite a major selloff in Asian equity markets.

The Eurozone wallowed close to a 10-week trough versus the U.S. Dollar after the release of disappointing inflation data in the Eurozone ignited investor speculation that the central bank might this week decide to provide additional quantitative easing in order to prevent a further slide into deflationary territory.

The U.S. Dollar Index moved higher during the Asian session, finding support after the release yesterday of solid growth data from the U.S. for the 4th quarter of 2013. FX players appear hopeful that the data could help to alleviate growing concerns over developing economies as well as mitigate the impact of the recent selloff in emergent market currencies.

Risk averse FX traders helped to send the Japanese Yen higher during the Asian trading session as uncertainty once again left markets jittery, however currency strategists are attributing the Yen’s bounce to position unwinding.

Though not as “powerful” as the world’s major central banks like the Federal Reserve and the European Central Bank, the Central Bank of the Republic of Turkey helped to turn the tide of the selloff in emerging markets by putting into effect a major interest rate increase of 4.25% which took overnight lending rate to 12%.

The U.S. Dollar firmed broadly on increasing speculation that the Federal Reserve Bank is likely to continue to taper quantitative easing as the U.S. economic recovery seems to be more solid than originally assumed.

The Japanese Yen inched higher to a 7-week peak versus its key rival, the U.S. Dollar, following a sell off of currencies from emergent markets around the globe.

The Japanese Yen and Swiss Franc both firmed on Friday after an overnight surge of the safe haven currencies precipitated by growing concerns of a Chinese economic slowdown following the release of an unexpectedly weak factory output survey.

The Canadian Dollar held close to a 4-year trough versus its North American counterpart, the U.S. Dollar, following comments made by officials at the Bank of Canada which seemed to suggest that monetary policy there is headed for a significant change.

Asian stocks rose yesterday as the two-day Bank of Japan policy meeting came to an end. The yen fell against all but one of its 16 major peers after the Bank of Japan failed to signal additional stimulus.

Rising expectations that the Federal Reserve Bank is once again prepared to begin tapering its monthly bond purchases has helped to broadly support the greenback against its peers during Asian trading.

The U.S. Dollar was broadly higher in the wake of unexpectedly strong economic data which appears to have convinced FX investors that the Federal Reserve Bank is likely to continue to taper as had been initially promised.

Following a two day rally, the U.S. Dollar’s gains were halted upon the release of unexpectedly mixed data which left market players guessing about the greenback’s likely future direction.