Canadian dollar surges on inflation jump

British pound – The pound rose to its threshold of resistance as investors lifted it higher as the risk rally remained intact. The pound also recently lost further support for any nearby increase in interest rates with anecdotal evidence indicative of a hangdog consumer. In data released Wednesday lending activity remained soggy with mortgage approvals remaining at a flat-line reading while consumer lending of just £200 million indicates little appetite for fresh debt at a time when prices are rising. An index of services also unexpectedly dropped 1.2% during April after rising by 0.8% in the previous month. The pound reached $1.6048 on Wednesday having tried to break through an area of seemingly tough resistance on three occasions in the last four days.

Aussie dollar – The Pacific unit was again unleashed on hopes that European tensions would be successfully resolved starting with Wednesday’s vote. Even a 2% decline in job advertisements for skilled workers failed to restrain the Aussie. By early morning in New York the unit had risen to $1.0621 U.S. cents adding about a penny on the day and edging closer to its highest in a week. The local dollar also brushed off a reading from Beijing showing further downturn in its leading index using April data.

Japanese yen – The recent bout of risk appetite may have taken its toll on the dollar but it’s also soured demand for the Japanese yen, at least in terms of the dollar. On Wednesday the Japanese yen eased to its lowest in four weeks with the dollar touching ¥81.26. The yen surged following news that Greek lawmakers accepted Papandreou’s austerity bill driving the unit to ¥80.58.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

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About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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