FX Roundup: Euro tumbles further, commodity currencies recover

Commodity linked currencies got rare respite while the euro registered further declines on Friday, after European Central Bank President Mario Draghi said monetary policy might be reviewed in March.

At a press conference following the ECB's decision to keep key rates unchanged, Draghi hinted overnight at policy action over the coming months to help push inflation back towards the target of just below 2%.

At 1545 GMT, the euro was down 0.40% against the greenback exchanging at $1.0831.

Simon Smith, chief economist at FXPro, said, “The implication from Thursday's comments from Draghi is that the single currency is once again entering a six-week period of uncertainty and guessing as to what the ECB will do come the March meeting.”

“More economic projections will be released and the ECB itself will have to choose whether to fulfil on the prevailing expectations. The ECB President himself shared a little bit of the blame for the disappointment seen in December, when the ECB was seen failing to follow through on to the extent that markets believed”

Continuing with major crosses, the pound rose 0.91% exchanging at $1.4351 on improved economic data. UK public sector net borrowing - defined as the budget deficit plus net investment - fell by £11.0bn or 12.9% in the financial year to date, bringing the total to £74.2bn, the Office for National Statistics noted on Friday. Concurrently, the central government's net cash requirement fell by £17.2bn to £63.1bn.

Elsewhere, the dollar rose 0.45% and 0.65% versus the Swiss franc and yen, exchanging at CHF1.0120 and JPY118.460 respectively. Meanwhile, major commodity linked currencies continued to grab attention as oil rebounded above the $31 per barrel mark; a marked improvement on the previous session but still close to lows last seen in December 2003.

The greenback fell 0.79% against the Canadian dollar exchanging at CAD$1.4153. Concurrently, the Australian dollar rose 0.39% against its US counterpart exchanging at US$0.7026 but the New Zealand dollar fell 0.55% exchanging at US$0.6494.

In Latin America, the dollar fell against major regional crosses, including the Colombian (down 1.52%), Mexican (down 1.52%) and Chilean (down 1.52%) pesos, and the Brazilian real (down 1.03%).