London Session – February 28, 2011 7:21 AM

The U.S. dollar was lower against most of the majors on views that the Fed’s accommodative stance is likely to persist while other central banks take a more hawkish tone in the face of higher global inflation. Euro zone CPI was released and while it saw a slight unexpected drop to 2.3% from the prior 2.4% (cons. 2.4%), the figure is still above the ECB’s 2% target. This fuelled speculation that the bank will take a more hawkish stance ahead of the European Central Bank’s meeting later this week. EUR/USD climbed to session highs of nearly 1.3845/50 after trading as low as around 1.3710 earlier in the session. The pair is currently around 1.3830. New Zealand’s Jan. trade balance came in better than expected with a surplus of 11M while the market was anticipating a deficit of -25M from the prior month’s -264M. This gave a slight boost to the kiwi, however the rally was short lived as NZ Finance Minister English said that economic growth will be slower in H1 as a result of last week’s tragic earthquake. He went on to note that the gov’t will bear the cost of rebuilding and will take on more short term debt. NZD/USD is currently trading around 0.7520, down from earlier highs of around 0.7550. Full text »

del.icio.us | Technorati | Stumble It!