Dollar Ends Week in Positive Territory As Ukraine Tensions Rise and and Other Top Forex News.
The dollar ended the week in positive territory against most of the major currencies, with concerns over ongoing tensions in Ukraine continuing to support demand for safe-haven assets such as the dollar.
Investors remain wary after tensions continue to increase in the region, despite efforts by Russian President Vladimir Putin to calm the situation. Despite Putin recommending Sunday’s vote on self-rule be postponed. Pro-Russian separatists said they plan to go ahead with Sundays referendum anyway, a move that some fear could lead to a civil war.
While, European Commission President Jose Manuel Barroso told reporters that the European Union was still struggling to agree on what approach to take on the crisis and that the event was the biggest threat to European security since the fall of the Berlin Wall.
The news caused the dollar to continue to strengthen against the euro, with EUR/USD closing the session down -0.62% at 1.3754.
The single currency remained under pressure following yesterdays comments by European Central Bank President Mario Draghi that the central bank is comfortable implementing QE measures at its next meeting, after the bank has published fresh forecasts for inflation and growth.
Official data on Friday, showed that Germany’s trade surplus narrowed to €14.8 billion in March from €15.8 billion in February, whose figure was revised from a previously estimated surplus of €15.7 billion. Analysts had expected the trade surplus to widen to €16.6 billion in March.
Meanwhile, the pound weakened against the dollar as concerns over mounting tensions in Ukraine overshadowed this mornings upbeat U.K. economic reports.
Data from the U.K. continues to impress, with manufacturing production rising 0.5% in March, beating expectations for a 0.3% gain, after a 1.0% increase the previous month.
While a separate report showed that the U.K trade deficit narrowed to £8.48 billion in March, from £8.75 billion in February, whose figure was revised from a previously estimated deficit of £9.09 billion. Analysts had expected the trade deficit to widen to £9.00 billion in March.
GBP/USD closed the session down -0.51% at 1.6845.
Elsewhere, the Japanese yen was marginally softer against the dollar. USD/JPY ended the session up 0.11% at 101.76.
While the Australian dollar was little changed Friday with revised forecasts on economic growth and the inflation outlook from the central bank not doing much to change opinions about the economy.
AUD/USD closed the session down -0.14% at 0.9360.
And the New Zealand dollar was softer after spending most of the day consolidating after falling sharply earlier this week.
NZD/USD closed the session down -0.39% at 0.8612.
Finally, the Canadian dollar fell following this mornings jobs data, which showed that the number of employed people fell by 28,900 last month, compared to expectations for a 12,000 rise, after a 42,900 increase in March. While Canada’s unemployment rate remained unchanged at 6.9% in April, in line with market expectations.
USD/CAD closed the session up 0.64% at 1.0900.
More coverage of today’s session.
- FT: Draghi performs another euro conjuring trick. – For a few minutes on Thursday, Mario Draghi, the European Central Bank’s president, lost his mesmerising grip over financial markets. Currency traders reacted badly as he opened a press conference after the ECB governing council’s meeting in Brussels. The euro shot higher on the bank’s apparent inaction – even though its strength is exacerbating eurozone deflation dangers. Against the dollar the currency almost hit a three-year high of $1.40.
- The Economist: Putin’s Ukrainian U-turn. – A few have welcomed Putin’s attempts to diffuse the current crisis in Ukraine, that has now escalated into a low-intensity war. It is to be hoped that they are right. But many more, including this newspaper, will greet Mr Putin’s words with due scepticism. Throughout the crisis, Russia has said one thing and done another. Even as the diplomacy takes its course, the West must sustain its pressure on Russia and its support for Ukraine.
More Top Stories:
Marc Chandler: Euro limps into the weekend: Here’s why. – It is not so much that the US dollar is building on yesterday’s gains, though the greenback is firmer against most of the major and emerging currencies. Rather, it is more the case that euro and sterling are extending their downside corrections and this is serving to spark a broader short-covering advance in the dollar.
FT: Two arrested in Australia forex probe. – Australian police have arrested a government employee and a banker on charges related to insider trading and abuse of public office, after a probe into suspicious trading in foreign exchange markets.
WSJ: Yuan ‘approaching equilibrium,’ China regulator says. – China’s foreign exchange regulator said Friday that the yuan continues to approach a level of “equilibrium” and that it would continue to move toward more market-based exchange rates.
FT: Big banks extend dominance of forex league table. – The biggest banks have reinforced their dominance of the $5.3tn a day foreign exchange market in the past year, according to a closely watched industry survey.
The Globe and Mail: Dismal jobs report takes steam out of Canadian dollar. – The Canadian dollar tumbled after this morning’s weak report on the country’s labour market, pulling back from what had been a recent pick-up.
SMH: Australian dollar going strong on better jobs figures. – The Australian dollar remains well above 93.5 US cents after better than expected employment figures fuelled hopes of a sustained jobs market recovery.
WSJ: New Zealand dollar tad lower but consolidating. – The New Zealand dollar is trading slightly lower late Friday but has spent most of the day consolidating after falling sharply earlier this week.
MarketWatch: Gold futures gain, but ready for weekly loss. – Gold futures posted modest gains Friday, but held their ground below the key $1,300 level and headed for a weekly loss as bulls struggled to build momentum off turmoil in Ukraine.