The dollar remains generally weak, hitting a fresh 16-month low against a basket of currencies in early morning trade as markets remain convinced that the Federal Reserve will keep its loose monetary policy, widening interest rate differentials in favour of higher-yielding currencies. According to Beige Book released last night (which will form the basis for discussion at the next FOMC meeting), the Fed believes that the US economy continued to improve over the past month on gains in manufacturing. However, firms are feeling the effects of higher energy and raw …

It seems that last month’s G7 intervention was the turning point for the Japanese Yen. The Group Of Seven Industrialized nations stepped in the currency markets on March 18th in order to halt the Japanese yen rise. The coordinated intervention occurred after the yen soared following a massive earthquake, tsunami and nuclear disaster, which struck Japan last month. Speculation the Japanese would liquidate their overseas assets and repatriate their funds for reconstruction triggered a demand for the yen pushing it up to record highs.
The appreciation of the yen created a …

The European Central Bank (ECB) is deciding on its next monetary move on Thursday 7 April at 11:45 GMT. This time around the market is pricing in the first interest rate hike following the financial crisis three years ago.
During the last interest rate meeting ECB President Jean Claude Trichet expressed the central bank’s growing concerns on higher price levels. Trichet said that ‘strong vigilance’ is needed indicating a rate hike as soon as April. Consumer Price Index revealed a higher than expected 2.6% gain in March adding to the expectations …

After a spike higher going into the weekend and hitting a 2011 high of $1.4268, the euro was largely range bound versus the USD yesterday before coming under some modest selling pressure in early morning trade on the back of news that Moody’s have downgraded Portugal’s sovereign debt. The dollar, however was held back by dovish comments from the Fed’s president overnight. Following on from comment from the Fed’s Dudley late on Friday, Bernanke sought to downplay fears of inflation, suggesting that monetary policy will remain on hold for some …

After drifting early in the day, the euro edged higher versus the dollar late yesterday after the ECB said that it will continue to provide ample liquidity to Irish banks. Upside versus the USD, however, was limited with talk of higher interest rates in the US by the end of the year (the Fed’s Kocherlakota said that higher short-term rates, perhaps a rise of 75 basis points, were “certainly possible” in late 2011) providing a bit of a lift for the dollar.
The US will be the focus of attention …

Non Farm Payrolls (NFP) is one of the most important and influential economic reports for the currency markets. The next NFP report will be released this Friday 1st of April at 12:30 GMT by the US Bureau of Labor Statistics. NFP expresses the paid jobs added or lost in the US economy excluding the farm sector as agriculture varies throughout the year.
Why do investors focus on the NFP monthly figures? NFP is a significant indicator for the health of the US economy as it provides insights into the country’s Labor …

The euro has slipped back below the $1.41 level versus the dollar, while also coming under some modest selling pressure versus the GBP, though not before hitting a five month high yesterday versus the UK currency. In terms of forex moves overnight, markets are reacting to comments from Fed officials suggesting that at least some members of the US central bank are starting to give greater consideration to an end to ultra loose monetary policy. The Fed’s Bullard (not a current voting member) told a conference in Europe that the …