British pound rallies after stronger-than-expected U.K. GDP data
By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar edged up against most rivals on Tuesday, although analysts said its upside was limited by expectations of more U.S. monetary easing ahead.
The U.S. Federal Open Market Committee meets next week and is widely expected to announce further quantitative-easing steps. That is expected to pressure U.S. Treasury yields and the dollar.
“Investors are unwilling to take on big risk ahead of next week’s FOMC, where further QE [quantitative easing] is anticipated. However, the size and the structure of Fed stimulus continues to leave uncertainty,” said currency analysts at Action Economics.
The dollar index (DXY 77.21, +0.11, +0.14%) , a measure of the U.S. unit against a basket of six major global currencies, rose to 77.261 from 77.075 in late North American trading Monday.
Against the Japanese yen, the dollar (USDYEN 81.0300, +0.2700, +0.3343%) bought ¥81.04, up from ¥80.81 late Monday See real-time currency quotes and tools.
The Japanese unit was unmoved earlier in the session, despite tough rhetoric against yen strength from Japanese officials.
“I think the moves yesterday were a bit one-sided,” said Finance Minister Yoshihiko Noda at a press conference, according to Dow Jones Newswires. “I will continue to closely monitor these moves with great interest.”
Minister of State for Economic and Fiscal Policy Banri Kaieda said he believes it would be acceptable to take measures against “excessive, one-sided” foreign-exchange moves, according to Nikkei.
The euro (EURUSD 1.3947, -0.0022, -0.1575%) slipped to $1.3957 from $1.3985 late Monday.
The British pound (GBPUSD 1.5853, +0.0122, +0.7755%) rallied 1% to $1.5864 in recent trading, buoyed by stronger-than-expected growth data.
The U.K.’s third-quarter gross domestic product grew by 0.8% compared to the previous quarter, the Office for National Statistics reported Tuesday. Compared to the same period last year, GDP grew 2.8%. Economists had forecast a 0.4% quarterly increase and a 2.4% annual rise.
