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Dollar weakens while Euro gains

Sterling held near a three-month high of $1.36 today, as traders paused ahead of a survey of Britain’s construction sector.
the pound was trading flat amid broad general dollar weakness after recording its best annual performance against the dollar last year since 2009, with an almost 10 percent rise.

A purchasing managers’ index (PMI) for the construction sector was expected to show activity at 52.5 for December, according to analyst expectations. It came in at 52.2 so slightly lower than expectations however this has no impact on the sterling value.

The dollar held near a four-month low this morning, having declined nearly 3 percent in the last three weeks as investors cut positions before manufacturing data and minutes of a December U.S. Federal Reserve meeting due later in the day.

Despite the biggest overhaul of the U.S. tax code in 30 years passed by U.S. policymakers in late-December, market strategists are downbeat about the prospects of the dollar in the near term.

The euro was flirting near a four-month high hit on Tuesday prompted by optimism over the euro zone’s economy and expectations the European Central Bank will wind down its bond-buying stimulus in 2018.

The ECB board member in charge of the central bank’s market operations, Benoit Coeure, said at the weekend he saw a “reasonable chance” bond purchases would not be extended beyond September.

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