The US dollar remained under pressure on Tuesday’s trading session especially against the Euro and Pound Sterling on positive development on euro zone’s debt situation and increase in German investor confidence.
Strategists from RBC Capital Markets commented, “Stronger U.K. and German data were the catalysts for British pound and euro outperformance.”
The dollar index DXY which measures the US dollar’s performance versus its six major rivals declined to 78.972 as compared to 79.371 on late Monday.
The Euro advanced to 1.3388 against the greenback as compared to 1.3292 on Monday. The British Pound also gained 0.4 percent to 1.5965 versus the greenback. The US dollar also declined versus the Japanese Yen to 82.61 as compared to 82.72 on Monday’s late trading session.
UK’s inflation rate increased to 3.7 percent in the month of December as compared to 3.3 percent in November which resulted in gains for the Pound Sterling. Investors are expecting a rise in interest rates by Bank of England as the key lending rate has been keep at its record low of 0.5 percent since last one year.
Currency strategist from Citigroup commented, “We expect that accelerating inflation and inflation expectations coupled with continuing signs of recovery in the U.K. economy will continue to push the MPC’s assessment of the balance of risks towards the danger of higher inflation.”
Though the British Pound seems to be moving in a strong bullish rally due to increased inflation however would face correction if the key lending interest rate is increased by Bank of England.
About the Author
Daily forex trading news written by Rehan from DailyForexTrade.com
