Euro May Strengthen Against USD To Highest Level In Over A Year

The euro may strengthen against its U.S. counterpart to the highest level in more than a year if the shared currency closes the week above a so-called retracement level of $1.30, the market is saying that the correction consolidation phase is ending and we’re now set to resume a bullish trend. The euro increased 0.3 percent to $1.3038 after earlier gaining 0.4 percent to $1.3053, its highest level in nearly a week.

GBP/USD
The stickiness in U.K. inflation may persist for a while, it is a by-product of the real adjustment that economy has been forced to make and there is no easy fixes to such real adjustments. House prices in the UK declined at a faster pace in November. The U.K.'s claimant count dropped by 3,000 month-on-month to 1.58 million in November, at the same time, the claimant count rate held steady at 4.8 percent as widely expected for November.

During three months to October, there were 2.51 million unemployed people, down 128,000 on a year earlier. The jobless rate was 7.8 percent down 0.5 on a year ago. The rate matched economists' expectations.

USD/JPY
When Shinzo Abe was prime minister in 2007, optimism among Japanese manufacturers such as Sony Corp. (6758) was near a 16-year high. Now, as polls suggest Abe’s party will retake power in elections on December 16, the Bank of Japan’s Tankan survey will probably show tomorrow that large manufacturers are the most pessimistic since the aftermath of the global recession.

Sony hasn’t made a net profit in four years. Abe’s intentions are very clear. He wants to weaken the yen, push up stock prices and improve sentiment, the yen fell 0.1 percent to 83.37 per dollar, and its lowest since March.

USD/CAD
The Canadian dollar touched an almost eight-week high against its U.S. counterpart before a Federal Reserve policy statement forecast to bring a new round of asset purchases to help drive the U.S. economy. Canada’s dollar gained for a seventh day, the longest streak since January 2011, as the U.S. central bank prepared to release a policy statement, followed by forecasts for growth, unemployment and inflation, the loonie rose 0.1 percent to 98.55 cents per U.S. dollar. One Canadian dollar buys $1.0147.