EUR/USD
The euro was near an 11-week low against the yen amid speculations that slowing inflation will prompt the the European Central Bank to reinforce its dovish stance when announcing an interest-rate decision today. The European statistics office in Luxembourg said yesterday retail sales in the region fell 1.6% in December from a revised 0.9% increase a month earlier. The expected today is that the ECB will hold its benchmark interest rate at a record-low 0.25%. Official figures last week showed that consumer-price growth slowed in January to match the weakest pace since November 2009.
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GBP/USD
The pound inched lower against the dollar on Wednesday after soft U.K. service-sector data hit the wire, though the currency did take back earlier losses and even jumped into positive territory at times due to less-than-stellar U.S. private employment data. Pound was trading at 1.6327, 0.02%, up from a session low of 1.6253 and off a high of 1.6341. Sterling softened on Wednesday after data revealed that activity in the U.K.’s dominant service sector slowed unexpectedly in January. The U.K. services PMI for January came in at seven-month low of 58.3, down from 58.8 in December. As the expected that the index to tick up to 59.0.
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USD/JPY
The yen moved higher against the U.S. dollar on Wednesday, but remained below 11-week strongest rate, as investors remained cautious ahead of European central bank decisions on Thursday and Friday’s nonfarm payrolls report. Yen was up by 0.31% to 101.32, holding lower than the 11-week strongest rate of 100.74 reached on Tuesday. Investors remained wary in the wake of a broad based selloff in emerging markets. Emerging markets rebounded on Tuesday, recovering from their sharp selloff in the past two weeks. Emerging markets have been hard hit by concerns over the impact of reductions to the Federal Reserve’s stimulus program and worries over a possible slowdown in China.
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USD/CAD
Canadian real estate market is showing signs of cooling to start the year as January sales dropped 2.2% to the lowest for that month since 2009. The Bank of Canada forecast last month housing won’t add to output in 2014. The nation’s statistics agency reported a surprise drop in building permits for December yesterday, the second straight decline. The total value of purchases in six major Canadian real estate markets rose 19%. Loonie is pointing higher for the seventh straight day against the U.S. today, pointing as best performed rate during the morning trades at 1.1059.
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