Forex: Wednesday's review
The dollar fell against most of its major counterparts on speculation central banks in Europe and the U.K. will seek to combat inflation from rising fuel costs by increasing interest rates before the Federal Reserve.
The euro climbed to an almost three-week high versus the greenback.
The pound gained versus the dollar as minutes of the Bank of England’s Feb. 10 meeting showed an additional policy maker backed an increase in rates.
European Central Bank policy makers will make the decisions necessary to maintain price stability, ECB President Jean-Claude Trichet told reporters today. The ECB will “inevitably” have to “rebalance our monetary policy stance,” with the 17-nation euro-area economy strengthening and inflation in breach of the central bank’s 2% limit, council member Yves Mersch said yesterday, without giving a time frame.
Governments rushed to evacuate thousands of expatriates from Libya as army units defected and a former aide to the leader Muammar Qaddafi warned that the spreading revolt may topple the regime within days. The nation holds Africa’s largest crude reserves.
Crude for April delivery rose as much as 6.8% to $99.94 a barrel in New York, the highest level since October 2008. In London, it gained as much as 5.7% to $111.85, the highest since September 2008.
Sterling gained after minutes of the Bank of England’s Feb. 10 rate decision showed Spencer Dale joined Andrew Sentance and Martin Weale in voting for higher rates as an increasing number of officials said the case for tightening policy had “grown in strength.” The central bank has held the rate at 0.5% since March 2009.
EUR/USD: on results of yesterday's session the pair become stronger in around $1.3740.
GBP/USD: the pair shown high in the field of $1.6270, then decreased and finished session in around $1.6200.
USD/JPY: on results of yesterday's session the pair become stronger in around Y82.50.
EMU data is due at 1000GMT with the business climate indicator expected to rise to 1.65 for February and the economic sentiment survey also expected to rise, to a reading of 107.0.
UK data sees just the 1100GMT release of both quarterly and monthly CBI Distributive Trades & Sales Balance data.
US data starts at 1330GMT, when initial jobless claims are expected to fall 5,000 to 405,000 in the February 19 week after rising in the previous week. At the same time, durable goods orders are expected to surge 3.0% in January after the 2.3% drop in December. Boeing reported 34 new orders in January, down from 55 in December, but nondefense aircraft orders are still expected to rebound from the 99.5% drop in the December data. At 1500GMT by the FHFA Home Price Index and also New Home Sales data is due, where the pace of new home sales is expected to slow to a 305,000 annual rate in January after the December spike. While home sales have improved in recent months, the data still point to significant weakness compared to a year earlier.
The weekly EIA Crude Oil Stocks data is due at 1600GMT.