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Yesterday the yen fell versus all of its 16 most-traded peers as a report showing German investor confidence rose to a two-year high fueled appetite for riskier assets. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which is designed to predict economic developments six months in advance, increased to 23.4 from 22.3 in March. That’s the highest since June 2010.
Canada’s dollar gained the most in four months against the greenback as the central bank said higher borrowing costs “may become appropriate” because economic growth will be faster than forecast. The Bank of Canada said the nation’s economy will reach full output in the first half of next year, sooner than a January forecast for the third quarter of 2013, while predicting that Europe will emerge from recession later this year and the U.S. recovery will be stronger than policy makers expected. The BOC kept its key interest rate unchanged today at 1 percent.
The euro was buoyed against the yen as increased demand at Spanish debt sales eased concern Europe’s sovereign- debt crisis is worsening. The euro gained versus the yen as the Frankfurt-based Bundesbank said the German economy, Europe’s largest, is in “remarkably good shape.” Growth should gather pace as unemployment at a two-decade low fuels domestic demand, it said in a statement today. The International Monetary Fund raised its economic growth estimates. Its World Economic Outlook forecast the global economy will expand 3.5 percent this year and 4.1 percent in 2013, an increase from its January projections of 3.3 percent growth in 2012 and 4 percent next year.
The pound climbed after U.K. consumer prices climbed 3.5 percent from a year earlier, after rising 3.4 percent in February, the Office for National Statistics said in London. The reading was higher than the 3.4 percent median estimate of economists, and above the central bank’s target of 2 percent.
EUR/USD: yesterday the pair traded about a level $1.3130.
GBP/USD: yesterday the pair gain, fixed above $1.5900.
USD/JPY: yesterday the pair rose to Monday’s high.
EMU data sees the ECB current account data at 0800GMT followed at 0900GMT by construction output. At 1300GMT, European Commission President Jose Manuel Barroso is due to discuss means to combat the Economic crisis in the Eurozone at the European Parliament. In the UK, at 0800GMT, Bank of England Deputy Governor Paul Tucker delivers a speech at the Association of Corporate Treasurers. It is also a key day for UK data with both the latest meeting minutes from the Bank of England and also labour market data at 0830GMT. At 1230GMT, US Treasury Secretary Tim Geithner will speak on the state of the global economy at the Brookings Institution in Washington. The weekly EIA crude oil stocks data is due at 1430GMT.
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