The dollar has extended its recent weakness against the Euro on Tuesday, but is up against both the pound sterling and the Japanese Yen. Investors continue to be concerned that the Federal Reserve may begin to taper its stimulus measures sooner rather than later, due to the strong U.S. jobs report at the end of the previous week. Investors will be listening for any clues on the matter later today, when Federal Reserve Chairman Ben Bernanke gives a speech.
The European Central Bank has room to cut interest rates further and it will also consider charging banks to deposit their cash, but such a move was unlikely in the near term, European Central Bank Executive Board Member Jorg Asmussen said on Tuesday.
The central bank has not reached the lower bound on interest rates and it depends on how inflation develops, Asmussen said in an interview to the German daily Neue Osnabruecker Zeitung. Last week, the ECB sprung a surprise by cutting the key interest rate by a quarter-point to a record low 0.25 percent, given the combination of low inflation, record unemployment and a stronger currency.
The Bank of France on Tuesday said it expects the economy to expand 0.4 percent in the fourth quarter. The estimate is based on the monthly index of business activity. The survey said business confidence among manufacturers improved unexpectedly to 99 in October from 97 in September. It was forecast to remain unchanged.
The dollar rose to an early high of $1.3358 against the Euro on Tuesday, but has since pulled back to a 3-session low, around $1.3430.
Germany’s EU harmonized inflation weakened in October at a faster pace than estimated earlier, final figures released by the Federal Statistical Office showed Tuesday. The harmonized index of consumer prices (HICP) advanced 1.2 percent in October from the same month of last year, slightly slower than the 1.3 percent gain the government had estimated earlier. In September, prices had recorded a 1.6 percent increase.
Germany’s wholesale trade prices declined at the fastest rate since late 2009 in October, data released by Destatis showed on Tuesday. The wholesale price index fell 2.7 percent year-on-year, following a 2.2 percent drop in September. The index dropped for the third successive month and the rate of decline was the biggest since November 2009, when prices decreased 3.7 percent, the agency said.
The greenback rose to a 2-month high of $1.5853 against the pound sterling early Tuesday, but has since eased back to around $1.5920.
U.K. inflation slowed more than expected in October to the lowest since September 2012, official data showed Tuesday. Nonetheless, it hovers above the 2 percent target. Consumer price inflation dipped to 2.2 percent from 2.7 percent in September, the Office for National Statistics said. It fell below the 2.5 percent consensus.
British factory price inflation eased to its lowest level in four years in October, a report from the Office for National Statistics showed Tuesday. The output price inflation in October eased to 0.8 percent, the lowest level since October 2009, from 1.2 percent in September. Economists expected the rate to fall to 1 percent.
An indicator of the performance of the British economy rose sharply in September, indicating that the ongoing recovery will continue in the coming months, survey data published by the Conference Board showed Tuesday.
The leading economic index advanced 1.5 percent sequentially to 107 in September. This followed a 1.2 percent gain in August and a 0.7 percent rise in July. Six of the seven components that constitute the leading index made positive contributions in September.
The buck climbed to nearly a 2-month high of Y99.788 against the Japanese Yen on Tuesday, but has since eased back to around Y99.670.
An index measuring tertiary industry activity in Japan was down a seasonally adjusted 0.2 percent on month in September, the Ministry of Economy, Trade and Industry said on Tuesday, standing at 100.1. That missed forecasts for an increase of 0.2 percent following the 0.7 percent gain in August.
Japan’s consumer confidence deteriorated unexpectedly in October, after improving in the previous month, latest data showed Tuesday. The headline consumer confidence index dropped to 41.2 in October from 45.4 in the previous month, the Cabinet Office said. Economists were looking for an improvement to 45.5.