Daily Currency Report

Overview

Even though it was Thanksgiving in the US, German business sentiment still caused a sell-off of the dollar against the euro. The euro has breached a key level against the dollar, not seen since April last year. The dollar has tumbled across the board, hitting a two-year high against the sterling, with the move exacerbated by thin trading.

GBP
The sterling has reached a two-year high against the dollar, despite the thin holiday trade. With no significant data releases, cable is taking its direction from buying in the euro/dollar.

USD
The dollar suffered from the move in euro/dollar, sparking a widespread selling of the greenback. The inference is that it is looking increasingly unlikely that the Federal Reserve will raise interest rates further!

EUR
The German IFO survey posted an unexpectedly high reading showing that economic conditions in Germany reached their highest level for 15 years in November. This enhanced the ECB's need for another rate rise from the current 3.25 per cent.

JPY
Carry trade liquidation was the main driver of a rally in the Japanese yen.

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