Dollar loses ground versus majors

Headlines

  • Sterling holds onto hard fought gains versus euro and dollar
  • Euro unchanged as markets eye key ECB Press Conference
  • Dollar loses ground versus majors

GBPUSD 1.3048 GBPEUR 1.0921 EURUSD 1.1946 USDCAD 1.2208 GBPINR 83.52 GBPAUD 1.6311 GBPAED 4.792

Pound

  • A lack of UK economic data yesterday was probably a good thing for sterling, as lately data to the upside or downside only seems to send the pound one way - down. Tuesdays rally in the pound saw impressive results as GBP/USD broke through the $1.30 handle and GBP/EUR went through 1.09. Those gains were held with cable trading around $1.3050 and GBP/EUR at 1.0918. As always, Brexit remains the main topic from sterlings point of view and looking ahead to today, all eyes will be on the first debate on the Brexit bill in the UK's Parliament today.

Euro

  • The euro edged up 0.1 percent to $1.1928 ahead of a European Central Bank policy meeting later today, although it was still trading below last week's high of $1.2070, its highest level since January 2015. The common currency has lost some momentum since hitting that 2-1/2 year peak, weighed down by rising expectations that a stronger euro could slow the European Central Bank's plans to rein in its bond-buying stimulus. Only 15 of 66 economists polled by Reuters said they expect the ECB to announce a reduction of its monthly asset purchases at Thursday's ECB policy meeting -- a sharp reversal from a month ago when slightly over half of respondents expected such a move. The focus is on whether ECB President Mario Draghi expresses any concerns about the euro's recent strength. "The market expects him (Draghi) to say something about it," said Tareck Horchani, head of sales trading in Asia Pacific for Saxo Markets in Singapore, referring to the euro's rise. The euro could rally if the ECB and Draghi don't mention anything about the euro's strength, Horchani said. If they do, and the euro sells off, the common currency may find support in the $1.17 to $1.18 area in the near term, Horchani added.

Dollar

  • President Donald Trump on Wednesday broke with his party to support a package that included a short-term debt ceiling extension. If Congress passes the package, which also includes relief funding for Hurricane Harvey, it would prevent a default on the federal debt. Equities in the U.S. closed higher on the developments, with the Dow Jones industrial average edging up 0.25 percent, or 54.33 points, to close at 21,807.64. The dollar lost some ground after strengthening against the Japanese currency on the news overnight. The greenback fetched 109.07 yen at 9:46 a.m. HK/SIN after slipping below the 109 handle briefly in early trade. Against both the pound and euro we saw dollar weakness as well. The greenback was slightly higher against a basket of currencies. The dollar index last stood at 92.229, compared to levels around 92.185 seen in the last session.

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