Despite The Decline Euro Remains Above 1.06, GBP/USD Is Trading Below 1.20
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An improvement in risk sentiment after the publication of upbeat macroeconomic data from China made it difficult for the US dollar to find demand on Wednesday.
USD/JPY
The USD/JPY pair in the Asian session recouped losses and rose towards 136.80. At the beginning of the European session, the yen dropped significantly to 136.2540, but quickly began to recover. At the time of writing, USD/JPY is trading at 136.7450
So far, the Japanese yen has been stable this week in a period where the US dollar has weakened significantly against most of its G-10 peers.
The yen's lack of strength may reflect the belief that the new Governor of the Bank of Japan (BoJ) Kazuo Ueda will maintain the very loose monetary policy of his predecessor.
EUR/USD
The euro pair is in a downtrend. It started the day high above 1.0670 but dropped to trade around 1.0620.
The euro fell against the dollar on Thursday after data showed inflation in the euro zone was not as high as investors had feared based on national readings in recent days.
Eurozone inflation eased to 8.5% in February from 8.6% a month earlier on lower energy prices.
The core inflation rate in the Euro Area rose for a third successive month hitting a fresh record high of 5.6% in February. The core CPI which excludes prices of energy, food, alcohol and tobacco went up 0.8%. The core number reinforces the idea that without decreases in energy prices inflation remains sticky and adding credence to the recent hawkish rhetoric from ECB policymakers.
Investors now see the ECB's 2.5% deposit rate rising by a combined 100 basis points in March and May, then to around 4.1% at the turn of the year.
GBP/USD
The pound pair against the euro is down today. GBP/USD traded below 1.20 again.
GBP/USD extended its decline and dropped below 1.2000 on Thursday after failing to capitalize on Wednesday's US dollar (USD) weakness. The couple looks delicate.
The British pound loses against the US dollar this Thursday as the dollar finds some support. Last night, Fed officials (Kashkari and Bostic) maintained their hawkish stance.
From the UK's perspective, the Brexit deal between the Prime Minister and the EU. Trade disputes with Northern Ireland have now been resolved, but the most surprising aspect of the deal was the favorable reception from some senior Brexiteers who praised the new concessions. While this is positive for the overall UK economy, the currency remains driven by central bank policy. The Brexit deal could bring short-term relief to the pound against the USD.
AUD/USD
The Australian movement is similar to its European counterparts. The AUD/USD pair remains above 0.67 despite a significant drop from 0.6767 to 0.6730.
Source: finance.yahoo.com, investing.com
