Forex Market Update: Euro Down Against Dollar, Sterling Up after BOE Minutes

Notwithstanding a spate of positive GDP data from the euro zone, the euro slipped against the U.S. dollar on Wednesday as rising yields on treasuries amid growing speculation that the Federal Reserve’s multi-billion asset purchase program could be tapered sooner than later, supported the demand for greenback.

At last check, the dollar index, a measure on U.S. unit’s performance against a basket of six major traded currencies, inched up 0.02% to 81.79.

The euro was last down 0.10% against the dollar to trade at $1.3249

Earlier today, an economic survey showed that the euro zone’s GDP rose 0.3% in the second quarter of 2013, beating economists’ expectation for 0.2% increase. Europe’s largest economy, Germany and the second largest economy, France also posted higher-than-expected GDP growth in the second quarter.

The euro initially gained against the dollar but quickly turned lower as the overall outlook of the euro zone’s economy, especially, the peripheral economies, is still fragile. In this backdrop, it is highly unlikely that the European Central Bank (ECB) will depart from its accommodating monetary policy stance.

“General dollar demand and rising U.S. Treasury yields are keeping the euro’s gains at bay. It didn’t react much to the better euro zone GDP data,” said Neil Jones, head of hedge fund FX sales at Mizuho Corporate Bank, according to Reuters.

Meanwhile the sterling rose against the dollar after minutes from the Bank of England’s (BOE) latest policy rate meeting showed that the vote on dovish forward looking guidance was not unanimous.

More Posts by this author

• 
  Stocks Held Moderate Gains By Mid-day Trade
• 
  Stocks Trade Slightly Higher
• 
  Forex Market Update: Dollar Index Sharply Lower as Investors Eye Fed’s Minutes
• 
  Gold Prices Slightly Down, Silver Prices Plunge More Than 1.50%
• 
  Stocks Futures Up After Best Buy & Home Depot Results
• 
  Urban Outfitters Q2 Profit Climbs 25% (URBN)
• 
  Bob Evans Q1 Profit Down Sharply (BOBE)

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.