Wednesday saw the US Dollar to Pound Sterling (USD/GBP), US Dollar to Euro (USD/EUR) and US Dollar to Japanese Yen (USD/JPY) exchange rates were all trending higher in the first half of Thursday’s European trading ahead of US Advance Retail Sales.
The US Dollar to Euro (USD/EUR) exchange rate was trending slightly higher on Wednesday while the US Dollar to Pound Sterling (USD/GBP) and US Dollar to Japanese Yen (USD/JPY) exchange rates took a dive in European trading.
UPDATE: The US Advance Retail Sales stat came in at 1.2% as forecast in May.
US Dollar (USD) Exchange Rate Rally Ends as Investors Eye FOMC Interest Rate Meeting
The US Dollar has been rallying for some time, as investors’ price in the possibility of a US Federal Reserve interest rate hike. However, doubts have begun to surface as next week’s Federal Open Market Committee (FOMC) meeting looms.
US President Barack Obama started off speculation pertaining to the US Dollar (USD) this week when it was reported he’d stated the currency was too high. However, President Obama rebuffed such claims, saying that he made it policy never to comment on everyday currency fluctuations.
However, since the initial uncertainty which caused the US Dollar (USD) to fall, investors have gotten cold feet, speculating that lawmakers and policymakers are uncomfortable with a stronger US currency. Last week, US Change in Non-Farm Payrolls data came in at 280K in the month of May and caused a US Dollar (USD) rally.
Capital Economics representative Neil Shearing commented: ‘We are getting some Dollar weakness after a period of strength following the payrolls. If retail sales tomorrow are strong, that will cement expectations of a rate hike in September, and I suspect we will see a renewed Dollar bounce and a sell-off in emerging markets.’
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0.6464 with -0.52% market movement.
The US Dollar to Japanese Yen (USD/JPY) exchange rate is trending in the region of 123.1200 with -0.98% market movement.
The US Dollar to Euro (USD/EUR) exchange rate is trending in the region of 0.8861 with +0.05% market movement.
Euro (EUR) Exchange Rate Forecast to Fluctuate on Greek Negotiations
Meanwhile, the Euro is trading amid a lack of Eurozone data in the second half of the week, leaving the currency vulnerable to any developments in the situation between Greece and its creditors.
Industry expert Valdis Dombrovskis commented: ‘I would say that reaching the agreement within coming days is possible, it’s possible to reach a staff level agreement which then can be approved by the Eurogroup of finance ministers.’
According to Greece’s retailers association, about 59 businesses close down and some 613 jobs are being lost each day
— MineForNothing (@minefornothing) June 10, 2015
Optimism appears in #Greece talks — some officials see a good chance of a deal next week
— Jan Strupczewski (@reutersJanS) June 11, 2015
The Euro to Japanese Yen (EUR/JPY) exchange rate is trending in the region of 138.8900.
The Euro to US Dollar (EUR/USD) exchange rate is trending at 1.1282.
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7292.
Japanese Yen (JPY) Exchange Rate Jumps after BOJ Kuroda Comments
The Japanese Yen (JPY) exchange rate was offered some support on Wednesday when the Bank of Japan’s (BOJ) Governor Haruhiko Kuroda made statements regarding the currency’s strength. Kuroda suggests that the Yen (JPY) is unlikely to weaken further in relative terms after a stint of recent losses.
BOJ’s Kuroda stated: ‘Generally and theoretically speaking, the fact that the real effective exchange rate has come this far means that it is unlikely to move further in the direction of Yen weakness.’
The Yen (JPY) jumped at the remarks amid an otherwise quiet trading session.
Foreign exchange strategist Daisaku Ueno commented: ‘I think it’s undesirable that the central bank chief’s comments are causing high volatility (like this). It’s particularly surprising because Mr Kuroda has been saying stable exchange rates that reflect fundamentals are desirable.’
By way of data, Wednesday saw Japanese Machine Orders jump from 2.6% to 3.0% in April on the year rather than contracting by -1.4% as forecast.
The Japanese Yen to US Dollar (JPY/USD) exchange rate is trending in the region of 0.0081.
The Japanese Yen to Pound Sterling (JPY/GBP) exchange rate is trending in the region of 0.0052.
The Japanese Yen to Euro (JPY/EUR) exchange rate is trending in the region of 0.7198.
UK Industrial Production Offers Pound Sterling (GBP) Exchange Rate Support
The UK also produced some upbeat ecostats on Wednesday in the form of Industrial Production data. The figure climbed from 0.7% to 1.2% on the year in April, rather than slipping to 0.6% as expected.
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is trending in the region of 190.5500 with -0.42% market movement.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5475 with +0.57% market movement.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3722 with +0.69% market movement.