NEWS / Foreign Exchange

Sterling also advanced against the euro as softer than expected German consumer prices data

A mixed bag of US economic data ??“ February finished goods prices rose more strongly unexpected, but the Empire State manufacturing index fell sharply ??“ saw the dollar easing ever so slightly against the pound on Thursday. Despite being down 0.3% on the week, the greenback ended the day 1.3% above its level of a month ago.

Sterling also advanced against the euro as softer than expected German consumer prices data ??“ the core CPI annual rate eased from 1.9% to 1.7% in February ??“ dampened expectations of significantly higher Eurozone interest rates. Nevertheless, the single currency still closed up 2.2% on the month.

Consequently, the euro edged up fractionally against the dollar, extending its advance over the past week to 0.9%.

The yen fell a full 1% against the dollar as the rally in global equity markets calmed investor fears that market volatility could trigger further unwinding of carry trades. This erased all of the Japanese currency??™s gains over the previous four sessions, although it still ended the day a net 2.8% higher on the month.

Similarly, the yen slumped 1.1% against the euro, closing down 1% for the week.

Meanwhile, with the quarter-point hike in Swiss interest rates fully discounted by markets, the Swiss franc eased 0.3% against the dollar as the low yielding currencies came under renewed pressure.