The single currency was under pressure on Friday after a speech by the ECB President Jean-Claude Trichet failed to dispel uncertainty about the bank’s policy steps next month. In the speech, he said ‘Any ambiguity in our medium-term policy direction would delay the return of sustainable prosperity’. The euro fell to its lowest level in one month versus the dollar to 1.3017 and 128.84 against the yen in late New York session. The euro-led decline also pressured the British pound and it fell sharply to as low as 1.4756 against the dollar before stabilizing.
The greenback was little change against the yen and traded around 99.25 in late New York session, however, concerns over the global economy continued to boost the safe-haven inflows into the U.S. and Japanese currencies. The ICE futures dollar index rose to as high as 86.025 before easing to trade at 85.994 in late New York session, while the yen gained broadly and sent currency pairs such as gbp/jpy, aud/jpy and nzd/jpy to session lows of 146.22, 71.11 and 56.10 respectively.
Meanwhile, Swiss franc tumbled against the euro and dollar after Siwss National Bank Chairman Jean-Pierre Roth warned the central bank was ready to intervene should the Swiss franc strengthen. The dollar rallied against the swiss franc and touched a session high of 1.1690, while the single currency jumped from 1.5095 to as high as 1.5240 versus the franc.
Economic reports from Japan and U.S. showed there were signs that the longest recession in the postwar era may be easing. The Japan’s consumer sentiment rose to a five-month high in March, climbed to 28.9 from 26.7 in February, while a separate report later in the day showed that confidence among U.S. consumers improved in April for a second month and rose to 61.9, the highest since September, from 57.3 in March.
Data to be released in the upcoming week include U.K. Rightmove house prices, Australia PPI data, Japan leading index, and U.S. leading indicators on Monday, German PPI data, U.K. CPI data and RPI data, and Canada BOC rate decision on Tuesday, Japan trade data, Australia CPI, U.K. BOE minutes, claimant count and PSNCR, and U.S. home price on Wednesday, eruozone PMI manufacturing and PMI service, and U.S. weekly jobless claims and exiting home sales on Thursday, and Japan all industrial index, U.K. CPI and retail sales, and U.S. durable goods and new home sales on Friday.