NEWS / Foreign Exchange

the pound was able to extend its recent gains against the euro

A rethink by analysts on how to interpret Wednesday??™s policy statement from the Federal Reserve enabled the dollar to steady on Friday. Although by dropping the reference to ???additional firming??? the Fed was widely seen as having shifted to a more neutral policy stance, traders concluded the first reduction in interest rates was still a considerable way off. Helped also by a larger than expected rise in existing home sales (offset in part by a 1.3% year-on-year fall in houses) , the dollar closed fractionally higher against sterling on the day, but still down 1% for the week.

However, the pound was able to extend its recent gains against the euro, rising 0.1% on the day and 1.1% for the week.

Consequently, the euro dipped 0.2% against the dollar, more than reversing its gains from earlier in the week.

However, the yen had its best day of the week, as traders took profits having rediscovered their appetite for carry trades at the beginning of the week.

Similarly, profit-taking saw the yen rebound 0.5% against the euro, although its till closed down a net 0.9% for the week.

However, the Swiss franc seemed to act more like a euro-clone than a low-yielder, as it eased a further 0.1% against the dollar.