EUR/USD
Euro-area consumer confidence unexpectedly increased to the highest in six and a half years in April, after the unemployment rate retreated from a record and the single currency bloc’s recovery gained momentum. “Consumer confidence is on a rising trend,” said Christoph Weil, an analyst at Commerz bank AG in Frankfurt. “There is a strong correlation between the unemployment rate and consumer sentiment, so improvements in the labor market are boosting confidence, helping the economic recovery gain momentum.” The jobless rate held at 11.9 percent in February, down from a record of 12 percent recorded last year. European Central Bank President Mario Draghi said on April 10 that while unemployment “remains high,” the labor markets “have shown first signs of improvement.” The euro extended gains against the dollar released, trading at $1.3815.
GBP/USD
Sterling approached the highest in more than four years against the dollar amid signs Britain’s economy will continue to expand at a faster pace than that of the 18-nation currency bloc. U.K. government bonds declined for a third day, with the yield on two-year gilts climbing to the most since July 2011. “The pound will trade higher versus the euro over time,” said Gavin Friend, a foreign-exchange strategist at National Australia Bank Ltd. in London. “The strength of the U.K. data is driving this. We think we’re on for something like 0.9 percent growth in the first quarter, well above the U.K.’s peer countries and that will just keep the pound supported.” Pound rose to 1.6830.
USD/JPY
Japan could cut its corporate tax rate as early as next fiscal year by 2 to 3 percentage points, gradually lowering the levy toward 25 percent in later years to boost the nation’s competitiveness, a tax panel member said. Japan’s effective tax rate of about 36 percent is the second-highest in the Group of Seven after the U.S. and compares with levies of about 24 percent in South Korea and 23 percent in the U.K. Sasaki said it’s important to begin cuts in the year starting April 2015 even if any initial reduction is less than the 5 to 10 points sought by other members of panels working on Prime Minister Shinzo Abe’s economic policy. The yen fell for a seventh day versus the greenback after a report showed Japan’s trade deficit widened more than forecast last month. The U.S. currency rose versus the euro as as leading U.S.
USD/CAD
Canada’s federal government last month introduced minimum requirements for the movement of grain by Canadian Pacific and Canadian National to help ease a backlog that has left billions of dollars of crops stuck on prairie farms -- a decision that Harrison and Creel repeatedly criticized today. Even as winter hampered operations, Canadian Pacific moved 15 percent more Western Canadian grain in February and 20 percent more in March, Creel said. Canadian Pacific is now exceeding the minimum volume threshold set out in the legislation, he said. The shares of Canada’s second-biggest railroad rose 5.3 percent to C$172.62 by 4 p.m. in Toronto, the biggest increase since October. The shares gained 7.5 percent this year, beating the 6.9 percent increase of the benchmark Standard & Poor’s/TSX Composite Index. Canadian dollar was little changed to 1.1020.
