Greenback Strong Despite Flat Data

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Geneva, Switzerland -- (SBWIRE) -- 01/28/2014 -- The greenback traded mostly higher against most other currencies on Wednesday independent of major economic announcements. The greenback was boosted by fresh speculations that the Fed might trim another USD5 billion of its monthly bond-buying stimulus program, bringing it down to USD65 billion a month. During late Thursday Asian session, the USD was up against EUR, CHF, AUD, NZD and CAD; mixed against JPY; and down against GBP.

Pound continues to rise against the Greenback after last Friday’s retail sales data released by the Office for National Statistics showed a jumped of 2.6% in December. Also, ONS said that unemployment rate in the UK fell to 7.1% in the 4th quarter of 2013, the largest drop since 1997. The unemployment rate is also just above BoE’s 7% threshold for the Central Bank to consider raising interest rates from the current record low of 0.5%.

Dollar was mixed against Yen on predictable monetary reports, gaining some ground yesterday but retreating back down during Asian session. BoJ has kept interest unchanged at 0.1% which doesn’t surprise the markets.

Dollar rose substantially against it Canadian counterparts as BoC maintained the interest rate at 1% yesterday. The central bank said Canadian inflation has fallen further below its 2% target and expected it will remain well below this target for some time. However, BoC said Canadian economic growth improved in the second half of 2013 due to stronger demand from the US. Recent depreciation of the Canadian dollar will help bolster exports this year.

The dollar held stronger ahead of the Fed’s monetary policy meeting next week. Investors are also hoping that the weekly jobless claims due later today will be encouraging and help spur the Fed to further cut stimulus program.

Economic data for the rest of this week are as follows:

Thursday: Markit’s PMI; US weekly initial jobless claims report and existing home sales
Friday: Canada CPI

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