The British pound rallied on Thursday after the Financial Times reported that Bank of England Markets Director Paul Fisher said policy makers 'would be more likely to suspend quantitative easing'. Fisher said it is more likely to pause asset purchases and give an option of 'doing more later' rather than stopping them. He also emphasised that he was confident the central bank's quantitative easing program was working. Speculators take Fisher's comments as a reason to buy sterling across the board, sterling advanced against dollar, euro and yen from 1.5994 to 1.6299, from 0.9332 to 0.9145 and from 142.89 to 147.59 respectively.
The single currency traded with a firm undertone in Asia and reached another fresh 09' high of 1.4967 but then retreated sharply on long liquidation following the release of Goldman Sachs' earnings (which increased to $5.25 compared to $1.81 a year earlier) for the third quarter and also active cross selling versus sterling (eur/gbp tumbled from 0.9332 to 0.9145). ECB's Trichet's comments that 'interest rates are appropriate at the moment' and 'the euro was not created to be a global reserve currency' pressured euro to as low as 1.4843 before rebounding on strong U.S. Empire state manufacturing index which came out as 34.6 in October (better than the forecast of 17.0 and 18.9 in previous month).
U.S. currency rose against the Japanese yen in Asian and European session on active cross selling in yen and edged higher to 90.79 after the release of better-than expected Jobless claims data (which came out as 514,000, lower than forecast figure of 525,000 and last week's 524,000). Australia’s dollar rose to a 14-month high of 0.9228 after Reserve Bank Governor Glenn Stevens said 'policy makers can’t be too timid in raising interest rates', raising speculation that more will be added.
Economic data to be released on Friday:
Switzerland retail sales, eurozone trade balance, Canada CPI, U.S. foreign treasury buys, industrial production and University of Michigan survey.