Currency Roundup.. 10th Sep '10

USD

 The dollar rose slightly against most counterparts on Thursday and traded mixed on Friday following a marginal improvement in the global economic outlook. Recent data showing a rise in US exports and a small drop in unemployment was followed last night by an increase in imports to China which was interpreted as a positive for China’s export trading neighbours. Mostly good euro-zone stats and higher employment in Canada also boosted global sentiment. On Friday, at midday GMT, the greenback was trading down to 1.2727 to the euro and 1.5454 to the pound.

EUR

In a day of two halves the euro made large gains in early trading on Friday as Italy and France announced generally positive economic stats, but the common currency sold off in the afternoon as the mood changed. Question marks over the veracity of the banking stress test results, the recent announcement of Allied Irish’s failure and news yesterday of further liquidity injections in Greece continued to dog the euro’s value. At GMT on Friday the euro was at 1.2727 to the dollar and 0.8234 against the pound.

GBP

After the ‘pounding’ yesterday sterling traded mixed today with a short-lived recovery rally in the morning followed by losses in the afternoon. The unexpected widening of the trade gap and government announcements of further cuts caused the rout on Thursday whilst today showed a slight decline in the PPI figure from 5.0% to 4.7% with 4.8% estimated. At GMT on Friday the pound was at 1.5454 to the dollar and 129.78 to the yen.

JPY

  Thursday saw further rises for the yen even after Finance Minister Noda threatened direct intervention and the introduction of a 915bn yen stimulus package. The markets have rejected the stimulus measures as inadequate because they will only account of 0.2% of GDP. This morning, however, the yen sold off as GDP revisions yesterday showed a healthy rise from 0.4% to 1.5%, with 1.5% expected; thus levelling safe haven demand. The yen traded lower at 83.98 to the dollar and up to 106.89 to the euro.