Euro, sterling strengthen on week

Story link: Euro, sterling strengthen on week

The Japanese yen weakened during the week after the Bank of Japan voted to raise the interest rate to 0.5 percent but said that further rises would be gradual and �accommodative�. Later comments by the Bank�s governor led most analysts to believe that the rate there would not be raised again in the foreseeable future. These remarks were only expected to increase the current explosion of the use of the yen to fund risky carry trades.

The yen dropped 2.1 percent to �237.50 against sterling, while it fell 1.7 percent to �159.50 versus the euro and was 1.5 percent lower to �121.50 in relation to the US dollar. The Japanese currency was also down 2.1 percent versus the Australian dollar to �95.80 and fell 2.6 percent against the New Zealand dollar, to �85.50.

Sterling strengthened over the week, adding 0.4 percent to �0.6710 versus the euro. The UK currency gained 0.7 percent to $1.9640 against the US dollar. Sterling�s gains had to do with currency-positive news concerning mortgage lending, business investment, and manufacturing.

The euro was also higher in relation to the greenback, adding 0.3 percent to $1.3180, largely due to analyst expectations for another interest rate hike in the Eurozone next month.