Forex Market Update: Dollar Gains Against Euro and Yen
The U.S. dollar rose against the euro and the Japanese yen in trading on Friday. The greenback also rose against the Canadian dollar.
The Canadian dollar fell to an 8-month low against the dollar following weaker than expected inflation and retail sales data. The weak economic data means that the Bank of Canada is unlikely to raise interest rates any time soon.
Speaking to Reuters, Mark Chandler, Head of Canadian Fixed Income and Currency Strategy at RBC Capital Markets, said that given the data, the move in the currency was justified.
At last check, Canadian dollar was trading at 97.96 U.S. cents. Earlier in the day, it fell to 97.50 U.S. cents, the lowest level since June 2012.
The U.S. dollar also edged higher against the euro and yen on Friday. The euro came under pressure after data published by the European Central Bank (ECB) showed that euro zone banks will repay 61.1 billion euros of the second-round of cheap loans they receive from the central bank last year. The amount is significantly below expectations, which suggests that euro zone banks are not out of the woods yet.
The euro fell to 1.3144 against the dollar, its lowest level in six weeks. At last check, the single currency was trading at 1.3183 against the dollar.
The euro also came under pressure after the European Commission forecast that the euro zone economy will once again contract in 2013.The European Commission’s outlook for euro zone economy overshadowed robust German economic data. Traders were also cautious ahead of the Italian elections, which will be held on February 24th and 25th.
Both, the dollar and the euro edged higher against the yen on Friday. At last check, the euro was up 0.3% to 123.12 yen, while the dollar was up 0.3% to 93.39 yen.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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