EUR/USD
The euro remained lower against the dollar on Monday as a shock contraction in Japanese third quarter growth weighed and Germany’s central bank warned that economic growth will remain weak in the coming months. EUR/USD was down 0.23% to 1.2498, off the highs of 1.2576 struck overnight. Earlier Monday, data showed that euro zone exports jumped 9% on a year-over-year basis in September, boosting the trade surplus to €17.7 billion, from €15.4 in August. The surge in exports boosted the outlook for third quarter growth. In the euro zone, Germany’s Bundes bank warned in its monthly report on Monday that the outlook for growth in the region’s largest economy was likely to remain weak in the next few months.
GBP/USD
The pound slipped against the U.S. dollar on Monday, re-approaching 14-month lows after data showed a decline in U.K. house prices and as last week's remarks by the Bank of England continued to weigh. GBP/USD hit 1.5620 during European morning trade, the session low; the pair subsequently consolidated at 1.5632, shedding 0.25%.Industry data showed that U.K. house prices dropped 1.7% in November, after a 2.6% rise the previous month. The pound also remained under pressure after the Bank of England said last Wednesday that inflation is likely remain below its 2% target in the near term and fall below 1% at some point during the next six months.
USD/JPY
The dollar firmed against the yen on Monday after data revealed Japan has officially entered a recession; though the Japanese currency took back some of its earlier losses. Official data released earlier revealed that Japan’s gross domestic product contracted by an annualized 1.6% in the third quarter following a 7.3% drop in the preceding quarter, which puts the country in a recession. Separately, Japanese Prime Minister Shinzo Abe was expected to postpone a planned sales tax increase due to come into effect next year after a sales tax hike in April of this year acted as a drag on growth.
