by Damian -
The US dollar exchange rates strengthened to a seven-year high against the yen before U.S. data this week that economists say will back the case for higher interest rates as Japan and Europe ease policy.
The greenback advanced to its strongest level in two years against the euro before the ECB meets tomorrow. It reached a four-year high versus the Australian Dollar rate after a report showed Australia’s growth was less than analysts forecast. The US dollar’s uptrend is likely to continue and that’s driven equally, if not more, by what’s going on outside the U.S. as well as what’s happening in the U.S.
Australia’s dollar weakened against all but two of its 16 major peers today after the Bureau of Statistics said gross domestic product advanced 0.3 percent in the third quarter from the previous three months.
The pound rose to a three-week high against the euro rate as a report showing UK Services expanded in November faster than analysts forecast signalled that the economy is weathering stagnation among its European neighbours. Sterling climbed for a third day against the shared currency and halted yesterday’s drop versus the dollar! The report, along with separate manufacturing and construction gauges, indicates the U.K. economy will grow 0.6 percent this quarter, Markit said. With inflation below the Bank of England’s target, economists forecast no change to policy tomorrow after Governor Mark Carney highlighted headwinds to growth such as a weakening euro area.
Euro-area services and manufacturing grew less than initially estimated last month, leaving the economy facing near-stagnation as the European Central Bank considers its options on further stimulus. The reading is the lowest in 16 months and points to economic growth of just 0.1 percent this quarter!
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