The dollar traded in a tight range on Tuesday after optimism over the news of a possible deal to temporarily lift the debt ceiling was offset by disappointment at lower-than-expected Existing Home Sales. The greenback ended the day at 1.3321 to the euro and 88.69 to the yen. The main event today is the vote in Congress to pass the new legislation to lift the debt ceiling.
The euro traded mixed on Tuesday. Positive sentiment data from the ZEW survey, which measures economic sentiment showed a better-than-expected outlook for the euro-zone over the next 6-months. The single currency ended the day at 118.17 to the yen and 0.8409 to the pound. Euro-zone Government debt figures and Consumer Confidence headline the news schedule on Wednesday.
The pound traded choppy on Tuesday after public finances showed a rise in borrowing of 200m above expectations in December, compared to the previous year. Uncertainty over the UK’s future in the European Union also weighed. Sterling ended the day at 1.5837 to the dollar and 140.46 to the yen. Today’s main event will be David Cameron’s speech on E.U membership.
The yen strengthened on Tuesday after the BOJ disappointed by delaying the introduction of unlimited QE for a year, to January 2014, at their rate meeting. The Japanese currency ended the day at 88.69 to the dollar and 118.17 to the euro. Today’s data includes the Trade Balance for December and the BOJ Monthly report early this morning.