Robust manufacturing activity from the world’s fastest growing major economy China, is dampening US quantitative easing concerns and helping to support risk-sensitive currencies. The New Zealand dollar has jumped to over two-year highs against the US dollar and sterling is also insight of recent eight-month highs after US Q3 growth figures disappointed markets on Friday. The UK currency continues its remarkable recovery, boosted by last week’s better than expected Q3 growth figures. The yen also reached 15-year highs against the US dollar however the Swiss franc dipped after KOF leading indicators forecast the Swiss economy to slow over the next six months.

Sterling

Sterling continued its remarkable recovery last Friday following Q3 growth figures released earlier in the week, which showed the economy performing significantly better than markets had forecast. Friday’s mixed data did little to halt the UK currency marching back towards recent eight-month highs against the US dollar.

US dollar

The US dollar is facing renewed selling pressure after data did little to ease expectations that the Fed will be forced to pump large amounts of quantitative easing into a flagging US economy. The US dollar has fallen to 15-year lows against the yen and back towards record low levels against rivals such as the euro.

Euro

Risk appetite is helping to support the euro’s move higher against safe haven currencies such as the yen and US dollar, despite data which raised question marks over the Eurozone economy. October’s HICP which tracks consumer price inflation rose above estimates to 1.9 per cent but still remains in-line with European Central Bank targets.

Japanese yen

The yen rose to 15-year highs against the US dollar but rebounded sharply in what appeared to be possible intervention action. The Bank of Japan remain on alert to a stronger yen, however investors were seen dumping the Japanese currency in anticipation of this week’s BoJ policy meeting.

Commercial Foreign Exchange Travelex Malta, freephone: 800 733 22, www.travelex.com/mt/

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