2009.02.1806:04:00UTC+00Euro Higher Against Most Majors

In early trading on Wednesday, the euro traded higher against its Swiss, Japanese and UK counterparts. Elsewhere, the euro is now trading near a 2-1/2 month low against the dollar.

The Eurostat said today that the Euro zone construction output declined 2.2% month-on-month in December, compared with a revised 1.7% fall in the previous month. Year-on-year, the construction output dropped 10.1% in December, after falling a revised 5.1% in November.

The euro strengthened to 1.4788 against the Swiss franc by about 3:30 am ET Wednesday, after falling to a 5-week low of 1.4703 during today's early Asian session. The pair closed yesterday's deals at 1.4717.

The European currency climbed against the Japanese yen during Wednesday's early trading. At about 3:15 am ET, the euro rose to 117.02 against the Japanese unit, but started ticking down thereafter. The euro-yen pair that closed Tuesday's deals at 116.29 is now worth 116.48.

The Bank of Japan began its two-day policy meeting today. Analysts expect the central bank to leave its interest rate unchanged at 0.10% at the end of the meeting tomorrow.

A final report from the Economic and Social Research Institute showed today that the Japanese leading index stood at 80 in December, revised up from the initial estimate of 79.8. In November, the reading was 81.8. Meanwhile, the coincident index for December was upwardly revised to 92.4 from 92.3. However, the reading was below November's 94.9.

The euro that fell to a 2 1/2 month low of 1.2576 against the US currency during Wednesday's early Asian session recovered the losses during the later part of the session. The pair extended its up trend in early European deals also but started moving down after rising to 1.2641 by about 3:15 am ET. As of now, the pair is trading at 1.2560. The euro-dollar pair closed Tuesday's deals at 1.2583.

From US, reports on housing starts and industrial production are due out in the New York session today.

Cleveland Federal Reserve President Sandra Pianalto, a non-voting member of the FOMC, is due to speak at a breakfast for commercial developers in Columbus, Ohio at 9:00 am ET on the same day. Meanwhile, Bernanke is scheduled to speak at the National Press Club at 12:30 PM ET.

The Federal Reserve is scheduled to release the minutes of its January 28th meeting at 2 pm ET. As expected, the Fed maintained its key fed funds rate target unchanged at 0%-0.25% at its January meeting. The post-meeting policy statement released yesterday stated that the Federal Open Market Committee continues to believe economic conditions warrant exceptionally low rates for some time.

Against the UK currency, the euro rose to 0.8923 in early trading on Wednesday. On the upside, 0.895 is seen as the next target level for the euro. At yesterday's close, the euro-pound pair was quoted at 0.8838.

The minutes of the Bank of England's Monetary Policy Committee meeting showed that policymakers were split while deciding on a 50 basis points rate cut. The meeting was held on February 4 and 5.

Eight members of the Committee voted to reduce the Bank Rate by 50 basis points to 1%. The well-known dove of the rate setting body, David Blanchflower preferred a reduction of 100 basis points. The interest rate now stands at the lowest level since the central bank was established in 1694.

Back to news list