Dollar drops as euro strengthens
A Chinese report has pushed the dollar lower this morning whilst the euro traded past USD1.50 for the first time in 14 months. Meanwhile, pound sterling was strained following a sell-off from last weeks high and the Australian dollar continues to climb against its US counterpart.
Pound Sterling - UK markets
Sterling remains under pressure this morning after falling 0.2% to USD1.626. The pound has remained moving in a range from 1.625 session low to 1.632 against the US dollar, attempting to set a base after Friday's sell-off from its USD1.669 high.
The pounds steep losses on Friday were extended following data which showed that the UK economy contracted in the third quarter, disappointing investors who had been paring short positions as they bet on an early return to growth.
US Dollar - US Markets
The dollar dropped to a 14-month low against the euro this morning after investors were urged to sell US currency further. This followed a Chinese report saying Beijing should increase its holdings of euros and yen in its foreign reserves.
The greenback was also lower against the higher yielding Australian dollar and fell against the yen, trading around 91.90.
US currency could weaken further later on today, particularly against the euro, which according to analysts is benefiting from stronger stock markets.
Euro - European Markets
The euro rose to its highest in 14 months against the dollar on Monday after the Chinese report prompted investors to sell the dollar for the single currency.
The euro hit heights of USD1.506 on the EBS trading platform, its highest since August 2008, before trading at USD1.505, up 3% on the day.
One of the reasons that the euro continues to strengthen against the major currencies is the positive data from the German economy, which shows clear signs of recovery.
Other Currencies - Highlights
The yen strengthened against the dollar hitting USD91.81 and retreating from a one-month high of USD92.23 which was reached earlier in the day.
Elsewhere, the Canadian dollar had a correction after the BOC released a dovish outlook at their Interest Rate meeting.
The Australian dollar rose 0.2% to reach USD0.924, rebounding towards a 14-month high of USD0.933 reached last week.