New data hurts euro, greenback

Story link: New data hurts euro, greenback

A comment from Japan’s chief cabinet secretary, who is considered to be the most likely choice to be the next prime minister, was credited with helping the yen strengthen on Tuesday. He said he believes that currencies should reflect economic fundamentals, which was interpreted by many analysts to meant that he is willing to see the yen strengthen in light of what seems to be a continuing economic recovery. The comments was also seen as confirmation of the view that politicians in Japan and Europe are deliberately trying to talk up the yen.

The Japanese currency was 0.2 percent higher in relation to sterling to ¥221.24, while it added 0.4 percent against the US dollar to ¥117.53. It was up by 0.5 percent versus both the euro and the Australian dollar, to ¥149.09 and ¥88.58 respectively.

Elsewhere in Asia, the Chinese renminbi added 0.14 percent in relation to the US dollar, to Rmb7.9363, a new high since last year’s revaluation.

The euro was hurt by news that investor confidence in German has declined to its lowest point since January 1999. The shared currency was 0.2 percent lower versus the greenback to $1.2675, while it dropped 0.3 percent against sterling, to £0.6735.

Meanwhile, despite a gain against the euro, the dollar was hurt by news on housing starts and core producer prices, which were both down in August, to the point that some analysts are now of the opinion that the next time the Federal Reserve changes interest rates, the move will be in a downward direction.