GBP Little Changed Against USD Friday
ICM Brokers | Oct 20, 2014 02:24AM ET
EUR/USD
The euro fell against the dollar on Friday as the greenback was boosted by data showing that U.S. consumer sentiment unexpectedly improved this month. The greenback was boosted after a report showed that the University of Michigan’s consumer sentiment index unexpectedly rose to 86.4 in October, the most since July 2007. Another report showed that housing starts rose more than expected last month, bolstering the outlook for the sector. The data reinforced expectations that the Federal Reserve will raise interest rates in the second half of 2015. Germany’s government cut its forecast for economic growth for this year and next on Tuesday, after recent data pointed to weakness in exports and industrial output. The euro area’s largest economy now expects growth of 1.2% this year down from 1.8% previously and growth of 1.3% in 2015, down from 2%.
GBP/USD
The pound was little changed against the dollar late Friday after data showed that U.S. consumer sentiment rose unexpectedly in October and following dovish remarks by a bank of England official earlier in the day. Another report showed that housing starts rose more than expected last month, bolstering the outlook for the sector. The data reinforced expectations that the Federal Reserve will raise interest rates in the second half of 2015. The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.33% to 85.31, but still ended the week lower, its second consecutive weekly decline. Earlier Friday, BoE Chief Economist Andy Haldane said that rates could remain lower for longer and warned that economic conditions have worsened. Haldane pointed to slowing global growth, heightened geopolitical and financial risks and the subdued inflation outlook due to slow U.K. wage growth and falling commodity prices worldwide.
USD/JPY
The dollar moved higher against the yen on Friday, as upbeat data on U.S. consumer sentiment boosted the outlook for an early rate hike by the Federal Reserve. The dollar strengthened broadly after a report showed that the University of Michigan’s consumer sentiment index unexpectedly rose to 86.4 in October, the most since July 2007. Another report showed that U.S. housing starts rose more than expected in September, bolstering the outlook for the sector. The data reinforced expectations that the Fed will raise interest rates in the second half of 2015. The dollar fell against the other major currencies on Wednesday, touching a one month low against the yen amid a selloff sparked by fears that slower global growth would act as a drag on the U.S. economy.
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