The euro and the British pound surged higher just ahead of the opening bell in Europe, adding 0.4% apiece against a dollar that remains strong.

Pound Sterling – UK Markets

The pound pushed higher against the US dollar by 0.2% to trade at 1.607 ahead of a report that is expected to show the UK economy shrank less than was originally reported in the third quarter. However, the data’s impact may prove limited unless the revision brings an upgrade of private consumption and investment.

US Dollar – US Markets

The dollar rose further against the yen on Tuesday, hitting a two-month high at 91.25 and keeping pressure on the euro, as year-end unwinding of short positions supported it along with higher Treasury yields. The dollar is riding on speculation that the Federal Reserve will withdraw stimulus earlier than expected on signs that the US economic recovery is gaining momentum.

Euro – European Markets

The euro is currently hovering around USD1.4294, just above a 3 ½ month low of USD1.4262 set late last week. After a decent spell in March, the euro has been under pressure this month on concerns about the fiscal health of some countries in the currency bloc, with Greece's sovereign ratings downgraded by two rating agencies this month.

Other Currencies – Highlights

New Zealand’s account gap has narrowed due to a record drop in imports. The Kiwi currently trades against the dollar at 0.704 whilst its Aussie counterpart hovers around 0.879.