EUR/USD
European Central Bank President Mario Draghi said the central bank is considering further non-standard monetary policy tools, and will deploy them if circumstances warrant. Draghi has in recent months held out the possibility of charging lenders to hold cash at the Frankfurt-based central bank by introducing a negative deposit rate. The rate has been at zero since July. That’s one of a range of tools, including further long-term lending operations and adjusting collateral requirements that the ECB is mulling. The euro fell as much as 0.3 percent to $1.3320 after Draghi’s comments. It later reversed its decline to trade at $1.3390, up 0.2 percent.
GBP/USD
The pound stayed lower against the dollar after the data, and was trading at $1.5652, down 0.4 percent on the day. The yield on the benchmark 10-year U.K. government bond raised 5 basis points to 2.13 percent. U.K. inflation accelerated more than economists forecast in May, as a record jump in air fares for the month helped extend its persistence above the Bank of England’s 2 percent target. Inflation will probably get above 3 percent in the next month or two,” said Vicky Redwood, an economist at Capital Economics Ltd. in London. “Thereafter, it should begin a slow but steady drift down and so “should not prevent Mr. Carney from giving the economy more policy support in order to achieve ‘escape velocity.
USD/JPY
The yen weakened for a second day against the dollar, as the Federal Reserve holds a two-day meeting that may provide more information when U.S. policy makers will start to reduce bond purchases. Japan’s currency pared its gain this month after the nation’s central bank estimated the current-account balance increased to a record amid unprecedented monetary stimulus. The real touched a four-year low, prompting the Brazilian central bank to intervene for a second straight day as a report showed higher-than-forecast inflation. The Swiss franc advanced versus all of its 16 major peers. Trading in over-the-counter foreign-exchange options totaled $23.1 billion, compared with $27.4 billion yesterday, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg. Volume in options on the dollar-yen exchange rates was $4.4 billion, the largest share of trades at 19 percent. Euro-dollar options were the second most actively traded, at $2.7 billion, or 12 percent.
USD/CAD
The Canadian dollar declined for a third day versus its U.S. peer amid speculation the Federal Reserve may indicate when it will begin slowing monetary stimulus in the U.S., the nation’s largest trading partner. The loonie fell 0.3 percent to C$1.0210 per U.S. dollar at 5 p.m. in Toronto. It touched a one-month high of C$1.0130 on June 14. One loonie buys 97.92 U.S. cents. Canada’s 10-year benchmark bonds fell, with yields adding one basis point.
European Central Bank President Mario Draghi said the central bank is considering further non-standard monetary policy tools, and will deploy them if circumstances warrant. Draghi has in recent months held out the possibility of charging lenders to hold cash at the Frankfurt-based central bank by introducing a negative deposit rate. The rate has been at zero since July. That’s one of a range of tools, including further long-term lending operations and adjusting collateral requirements that the ECB is mulling. The euro fell as much as 0.3 percent to $1.3320 after Draghi’s comments. It later reversed its decline to trade at $1.3390, up 0.2 percent.
GBP/USD
The pound stayed lower against the dollar after the data, and was trading at $1.5652, down 0.4 percent on the day. The yield on the benchmark 10-year U.K. government bond raised 5 basis points to 2.13 percent. U.K. inflation accelerated more than economists forecast in May, as a record jump in air fares for the month helped extend its persistence above the Bank of England’s 2 percent target. Inflation will probably get above 3 percent in the next month or two,” said Vicky Redwood, an economist at Capital Economics Ltd. in London. “Thereafter, it should begin a slow but steady drift down and so “should not prevent Mr. Carney from giving the economy more policy support in order to achieve ‘escape velocity.
USD/JPY
The yen weakened for a second day against the dollar, as the Federal Reserve holds a two-day meeting that may provide more information when U.S. policy makers will start to reduce bond purchases. Japan’s currency pared its gain this month after the nation’s central bank estimated the current-account balance increased to a record amid unprecedented monetary stimulus. The real touched a four-year low, prompting the Brazilian central bank to intervene for a second straight day as a report showed higher-than-forecast inflation. The Swiss franc advanced versus all of its 16 major peers. Trading in over-the-counter foreign-exchange options totaled $23.1 billion, compared with $27.4 billion yesterday, according to data reported by U.S. banks to the Depository Trust Clearing Corp. and tracked by Bloomberg. Volume in options on the dollar-yen exchange rates was $4.4 billion, the largest share of trades at 19 percent. Euro-dollar options were the second most actively traded, at $2.7 billion, or 12 percent.
USD/CAD
The Canadian dollar declined for a third day versus its U.S. peer amid speculation the Federal Reserve may indicate when it will begin slowing monetary stimulus in the U.S., the nation’s largest trading partner. The loonie fell 0.3 percent to C$1.0210 per U.S. dollar at 5 p.m. in Toronto. It touched a one-month high of C$1.0130 on June 14. One loonie buys 97.92 U.S. cents. Canada’s 10-year benchmark bonds fell, with yields adding one basis point.