Pound and euro up on positive European data

Published: 5 Sep at 9 AM Tags: Euro, Dollar,

The dollar is hovering just below its highest level in six weeks as investors watch to see if jobs data due out at the end of the week will push the Federal Reserve to make a definitive decision on tapering quantitative easing before the end of the month.

Indications that if the US does decide to go ahead with military strikes against Syria the action will be short-lived have weakened the safe haven yen as investors turn towards riskier assets. The Japanese currency hit a one month low against the greenback. The dollar is currently worth 99.71 yen.

The pound is also up against the yen at 155.70 yen. There is evidence that the UK economy is picking up at the moment. Although this is good news for sterling in the short-term, it could lead to the Bank of England making a decision to tighten monetary policy before was initially indicated.

The euro is down slightly against the dollar to $1.3185 and a policy meeting today at the European Central Bank is expected to result in interest rates remaining low as a way of aiding economic recovery in the eurozone.

A thorn in the side of the euro at the moment is the political tension in Italy. Silvio Berlusconi’s supporters are threatening to derail the government if the Senate decides to expel him because of a conviction for tax fraud.