EUR/USD
The euro weakened from almost a seven-week high before the European Central Bank is forecast to refrain from adding additional monetary stimulus at a meeting tomorrow. The U.S. currency strengthened as Yellen told a congressional panel that data show “solid growth” for the economy in the second quarter, bolstering the case for a faster expansion this year. Regarding to the U.S. side, Federal Reserve Chair Janet Yellen made it clear she believes the economy still requires a strong dose of stimulus five years after the recession ended because unemployment and inflation are well short of the Fed’s goals yesterday. The euro fell 0.1% to $1.3910, after climbing to $1.3951 yesterday, the highest since March 13.
GBP/USD
The pound reached the strongest level in nine weeks against the euro before the Bank of England announces its monetary policy decision tomorrow. The U.K. currency was about 0.2% from the highest since August 2009 versus the dollar amid speculation an improving economy will spur the central bank to increase interest rates sooner than it currently predicts. Bank of England governor Mark Carney said last week borrowing costs may remain low due to slack in the labor market. U.K. government bonds were little changed. The central bank will leave its Official Bank Rate at a record-low 0.5% tomorrow, according estimates. The decision will be the first since the jobless rate dropped enough to void Carney’s initial commitment on borrowing costs. Even with unemployment falling, he has pushed back against expectations of an imminent rate increase, saying more spare capacity needs to be absorbed before policy makers can remove stimulus. The U.K. currency was little changed at $1.6964, after advancing to $1.6996 yesterday, the strongest since Aug. 6, 2009.
USD/JPY
Yen drop against the greenback on Wednesday after Russian President Vladimir Putin said he would do all he can to diffuse the crisis in neighboring Ukraine, though comments Federal Reserve Chair Janet Yellen capped the greenback's advance. The samurai currency was up 0.05% and trading at 101.73, up from a session low of 101.43 and off a high of 102.01. on the other hand in U.S., Federal Reserve Chair Janet Yellen said earlier that a high degree of monetary accommodation remains warranted given the slack still persistent in the economy, and added that while conditions in the U.S. labor market have improved, they remain far from satisfactory. Yellen added that monetary authorities expect economic growth to accelerate this year despite the slowdown in the first quarter but warned that the recent housing market slowdown "could prove more protracted than currently expected."
USD/CAD
Canadian building permits fell in March to the lowest level in more than a year, led by a plunge in non-residential construction plans. The value of municipal permits fell 3.0 percent to C$5.99 billion ($5.50 billion), the least since February 2013, following a revised 11.3 percent drop in the previous month, Statistics Canada said today in Ottawa. The forecast was a 4% gain in March. Permits for non-residential construction fell 8.8% to 2.31 billion, driven by a 29.4% plunge in Ontario, Statistics Canada said. The agency cited fewer construction intentions for factories in Ontario and Quebec as contributing to the drop in non-residential permits. Residential permits rose 1% in March to 3.67 billion after a 20.8% drop the previous month. The value of permits was 5.5% lower in March than the same month a year earlier. While the figures are volatile, with a gain of as much as 26% and a decline of 23% reported since the start of 2011, the trend has been downward in recent months. The March figure was 26% below its record high, which was reached last July. Today the Loonie declined a little reaching the level of 1.0904, from 1.0892. Added another loss for yesterday’s 0.1%.
