Euro Spikes on Rate Hike Chatter

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The euro stood out as the outperforming currency in overseas trading as remarks from European Central Bank member Jens Weidmann briefly lifted EUR/USD to 1.0470 and EUR/JPY to a 10-day high of 0.85, the pair’s fourth consecutive day higher.

In an interview with a German publication, Weidmann cautioned that the ECB should not wait too long to raise interest rates. Although his remarks seemed grossly premature for the current economic environment in Europe, it followed a sizable gain in German import prices for November. The spike in the euro was short-lived, however, and within minutes both EUR/USD and EUR/GBP had returned to their prior levels, though still leaving the euro higher from Wednesday.

USD/JPY barely budged from 117.60, wedged into a razor-thin range since Wednesday’s North American close, stifled by a deluge of U.S. economic data and the upcoming Christmas holiday. GBP/USD is also treading water but in a slightly wider range between 1.2325 and 1.2350.

The USD/CAD pair is grinding higher and was last at a three week high of 1,3480 on corresponding weakness in oil futures as well as on the expectation for upcoming Canadian CPI and retail sales data to disappoint. USD/CAD was last trading nearly 0.50% higher.

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