Major Currency Pairs Analysis: December 17, 2014
ICM Brokers | Dec 17, 2014 05:41AM ET
EUR/USD
The euro trimmed gains against the dollar on Tuesday, following the release of mixed euro zone data. The single currency touched session highs after data showing German economic sentiment improved to its highest level since May this month, indicating that conditions are becoming more favorable. In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment jumped to 34.9 from 11.5 in November. It was the highest reading since May 2014 and easily outstripped forecasts of 20.8. In Germany, preliminary manufacturing PMI rose to a two-month high of 51.2 this month from a final reading of 49.5 in November. Analysts had expected the index to tick up to 50.4. Markit also reported that France's manufacturing PMI fell to 47.9 this month from a final reading of 48.4 in November, while the preliminary reading of the French services PMI improved to four-month high of 49.8 from a final reading of 47.9 last month, and ahead of expectations for 48.3.
GBP/USD
The pound was higher against the U.S. dollar on Tuesday, even as data showed that consumer price inflation in the U.K. rose at the slowest rate in 12 years in November. In a report, the U.K. Office for National Statistics said the annual rate of consumer price inflation slowed to 1.0% last month from 1.3% in November. It was the lowest rate of inflation since September 2002 and was below forecasts of 1.2%. Falls in transport costs, notably motor fuels and in the price of food alcoholic drinks were the main contributors to the decline. Lower prices for some recreational goods in the run up to Christmas also contributed.
USD/JPY
The Japanese yen weakened on Wednesday despite a narrower than expected trade gap last month in Japan as a brewing financial crisis in Russia roils markets. Trade data for November showed a deficit of ¥891.9 billion, narrower than the ¥1.001 trillion expected.
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