Currencies

• EUR/USD The EUR/USD opened the Asian session at 1.4330 due to heavy EUR/JPY demand and heightened expectations the ECB will be very hawkish in their comments after hiking rates later today. The market is aggressively pricing in ECB rate hikes for the rest of 2011 - so there is a risk there could be some disappointment if the ECB does not strongly indicate the market's pricing is appropriate.


• GBP/EUR Sterling weakened against the euro after a report showed U.K. manufacturing growth unexpectedly stalled in February, fueling speculation that the Bank of England will keep interest rates lower for longer. Factory output was unchanged from January, when it rose 0.9 percent, the Office for National Statistics said today in London. The Bank of England will keep its key rate at a record low tomorrow, a survey of economists showed. The pound weakened 0.6 percent to 87.84 pence per euro as of 4:57 p.m. in London.


• USD/JPY The yen rose for the first time in 11 days versus the dollar as technical charts showed its recent decline was excessive and on speculation Japanese exporters took advantage of the currency's slide to a six-month low to purchase it. Japan's currency rose 0.4 percent to 85.17 per dollar after sliding to 85.53 yesterday.

Commodities

GOLD declined on speculation that investors are locking in gains after the price rose to a record earlier, and as central bank efforts to fight inflation curbed demand for precious metals. The metal rose to a record this week as fighting in Libya, Japan's nuclear crisis and concerns about European debt boosted demand for the gold as a protector of wealth. Immediate-delivery bullion fell as much as 0.4 percent to $1,454.45 an ounce before trading at $1,454.95 at 12:10 p.m. in Singapore. Gold for June delivery in New York was little changed at $1,457.70.

OIL dropped from the highest in 30 months in New York after China raised domestic fuel prices and U.S. stockpiles climbed. Futures slid as much as 0.4 percent after China's National Development and Reform Commission said gasoline and diesel retail prices will increase today because of global crude costs. U.S. oil inventories rose for a fifth week to 357.7 million barrels, according to an Energy Department report yesterday. Crude oil for May delivery slipped as much as 47 cents to $108.36 a barrel in electronic trading on the New York Mercantile Exchange.

Sources: Bloomberg, FT