EUR/USD
Euro rose to the highest level in a week against the U.S. dollar on prospects Federal Reserve Chair Janet Yellen will underscore expectations that the central bank will maintain stimulatory policies. The greenback held losses from yesterday, when 10-yearTreasury yields fell to a six-month low, dimming the allure of U.S. assets. While data today may show a pickup in New York manufacturing and faster inflation, Yellen said last week the economy needs support. The dollar was little changed at $1.3720 per euro. The New York Fed may say today its gauge of manufacturing in the state rose to 6 this month from 1.3 in April, according to the estimate. A separate report by the Labor Department may show consumer prices in the world’s biggest economy gained 0.3% last month after a 0.2% advance in March.
GBP/USD
U.K. government bonds advanced, with two-year yields having their biggest two-day decline since June, after a government report showed weekly earnings rose at a slower pace in the three months through March than economists estimated. Derivatives based on the sterling overnight interbank average showed expectations that policy makers will keep borrowing costs unchanged through April 2015. As recently as yesterday, they showed expectations for an increase in February. U.K. policy makers in their quarterly Inflation Report said while the level of spare capacity in the economy had “narrowed slightly” in the past three months, there “remains scope to make greater inroads into slack before raising Bank Rate. The pound also dropped versus all against the U.S. dollar as the Office for National Statistics said wages excluding bonuses increased 1.3% in the first quarter, less than the estimate of 1.5%. Jobless claims fell 25,100 in April, versus the 30K decline forecast in a separate survey. The pound fell 0.4% to $1.6767 yesterday after climbing to $1.6996 last week, the highest level since August 2009.
USD/JPY
The yen remained higher against the greenback after its One-day longest gain in a week on prospects Federal Reserve Chair Janet Yellen will underscore expectations that the central bank will maintain stimulatory policies. The U.S. dollar held a loss against the samurai currency from yesterday, when the benchmark Treasury 10-year yield fell to a six-month low, dimming the allure of U.S. assets. While data today may show a pickup in New York manufacturing and faster inflation, Yellen said last week the economy still needs support. The euro remained higher versus the pound before a report that may indicate growth accelerated in the region. Yen gained 0.1% to 101.83 after the climb of 0.4% yesterday, the biggest one-day gain since May 6. The yield on U.S. government debt due in a decade fell to as low as 2.52% yesterday, a level unseen since Oct. 31.
USD/CAD
The Canadian dollar was almost unchanged against the U.S. dollar, as trade remained subdued without any significant economic data to give investors a clear direction. Loonie was last trading at 1.0880 and was moving in a range of 1.0891 to 1.0878. The pair showed little reaction after data released earlier Wednesday showed that U.S. producer prices rose more than expected in April, while core prices also beat expectations. U.S. producer prices increased by 0.6% last month the Commerce Department said, above forecasts for a 0.2% gain, after rising 0.5% in March. The producer price index rose at an annualized rate of 2.1% in April, above expectations for a 1.7% increase and up from 1.4% in the preceding month. The core producer price index advanced 0.5% last month, compared to expectations for a 0.2% increase, and was up 1.9% from a year earlier.
