RESEARCH VIA FOREX REPORT FOR 16 JUNE 2014

MARKET HEADLINES

Dollar edges up vs yen, sterling drives higher
The dollar was up around a third of a percent against the yen as markets listened to the Bank of Japan's latest comments on policy on Friday while sterling soared on the back of a surprise hint from the Bank of England that interest rates could rise this year. The big action overnight was all on the pound. BoE Governor Mark Carney sent money market rates spinning higher by telling the annual Mansion House dinner that rates may rise sooner than markets currently expect. That sent sterling to a 19-month high against the euro and close to key resistance around $1.70, up around 1 percent since the close of play in London on Thursday. "For us this was a clear signal that the first hike will come this year," said Lee Hardman, a strategist with Bank of Tokyo Mitsubishi-UTJ in London. "We think the first month for the bank to move will be November. The move was all the more shocking given how little faith the market has shown in sterling's ability to rise further against the dollar after a 10 percent rise in the past year. 

The currency has baulked so far this year at any attempt to breach $1.70 and some dealers said sellers had already appeared around $1.6980. "The market is getting very ahead of itself we are very much in overshoot land," said one trader in London. Most analysts and traders have continued to back sterling against the euro, however, which was worth less than 80 pence for the first time since November 2012 as European trade got going

Rupee at 1-month low as crude spikes on Iraq tensions
Rupee hits day's low of 59.50, tracking weak global cues following tensions in Iraq and downbeat US economic data.Asian stocks slid and crude oil scaled nine-month highs on Friday as escalating civil war in Iraq hit risk appetite. Asian currencies were trading mixed against the dollar. Traders expect the pair to see some resistance around 59.50 levels and strong resistance at 59.60 levels. The domestic stock market was trading marginally higher and will be watched for cues on foreign fund flows.

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