Sterling strengthens while yen declines

Story link: Sterling strengthens while yen declines

The Japanese yen was higher versus both the US dollar and the euro during Tuesday’s session, but it later dropped to losses on both currencies after US Treasury Secretary Hank Paulson made comments that were taken to mean that the US is not too concerned about recent yen weakness. After the yen rose to ¥119.98 versus the greenback and to ¥155.27 in relation to the euro, it dropped back to a decline of 0.1 percent against the dollar to ¥120.50 and to ¥156 versus the shared currency, a decline of 0.3 percent.

The US dollar dropped 0.3 percent versus the euro to $1.2955 even though new data showed that retail sales in the Eurozone and factory orders in German were both lower than had been expected in December. The decline was blamed on the pressure put on the dollar by oil prices. At least one analyst said that the European data in December should not be taken too seriously, at any rate, as it could just be a reaction to the strength seen in the third quarter and predicted that the European Central Bank will raise Eurozone interest rates again in both March and June, which will give more support to the euro.

Sterling was stronger, adding 0.2 percent to £0.6580 versus the euro, gaining 0.5 percent on the greenback to $1.9690, and rising 0.6 percent to ¥237.10 against the yen. Retail sales were strong in January according to the British Retail Consortium, which reported that like-for-like sales were up by 3.1 percent in January after having risen 2.5 percent in December.