Currency markets are in need of inspiration as economic data agenda is just not the sort of figures that stir trade. Currency gains were interrupted by comments from European Central Bank’s Noyer, who did his best to talk the single currency down. Focus should shift towards the UK where negative BRC retail sales were released. Extreme weather conditions have been negatively skewing data in the US, and such a figure in the UK calls into question what sort of impact the recent floods have had on its economy. In the Asian session, the Bank of Japan announced that they were leaving the policy unchanged and had little impact on the yen, but the New Zealand dollar is moving higher in anticipation of a rate increase.

US dollar

The lack of economic data and flat trade in equity markets left currency markets less than inspired in the afternoon session. Trading is beginning to feel as if investors are sitting on their hands waiting for the FOMC next week.

Sterling

Sterling felt the heat coming off recent highs against the euro when Bank of England’s Bean said that further strengthening of the pound would not be helpful in rebalancing the economy. The comments come just in front of the release of BRC retail sales. While the data is disappointing, investors could easily shrug it off as attention turns to the release of industrial and manufacturing output as well as comments from BoE’s Carney.

Euro

The economic data released was not enough to drive the euro bank towards its highs seen last Friday. The Sentix sentiment survey rose to highs not seen since April 2011 and the European Central Bank said that they were not very happy with the euro’s rise.

Japanese yen

The Japanese yen showed little reaction to the BoJ announcement that it was leaving its policy unchanged. The central bank said that growth and inflation were on expected paths, but that downside risks remained as a result of weak demand for exports. The weaker outlook on export was balanced by an improved forecast for capital expenditure, industrial output and domestic demand.

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