The greenback fell across the board on Tuesday as hopes on economic recovery remained and spurred purchasing in high-yielding assets. 3-month LIBOR slid below the rate for the franc for the first time since November 2008, making dollar the cheapest currency to fund buying in risky assets. USD/CHF penetrated last week's 1.0275 low and fell to a fresh 2009 low of 1.0216. On equity market, Dow Jones index rose 51 points to end at 9829.
In European morning, the single currency extended Monday's rebound from 1.4611 amid thin trading volume (no major data out fm Eurozone and some traders were sidelined before the FOMC rate decision), price reached a fresh 2009 high of 1.4822 ahead of New York Opening before easing in U.S. session (U.S. home price came out at 0.3%, lower than forecast of 0.5% but still posted a 3 consecutive month gain).
Sterling traded sideways in Asia and rallied in European session due to greenback’s broad-based weakness and also short covering against euro (EUR/GBP retreated from 5-month high 0.9082). Cable continued to edged higher in U.S. session as strong equity markets encouraged demand in high-yielding currencies. Price once reached 1.6395 in New York morning before easing.
Economic data to be released on Wednesday include:
New Zealand GDP, German and eurozone service and manufacturing PMI, U.K. BoE meeting minutes and vote outcome, eurozone industrial orders and U.S. Fed rate decision (while Fed rate is widely expected to remain unchanged at 0-0.25% range).