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Market Review - 29/08/2013 21:37GMT
Dollar strengthens broadly on upbeat U.S. jobless claims and GDP
The greenback advanced broadly on Thursday as better-than-expected U.S. jobless claims and GDP data showed U.S. economy is growing with a firm undertone.
Versus the Japanese yen, although the greenback fell from Asian top at 97.91 to 97.45, the rebound in Japanese equities lifted the pair, price rose above 97.91 to 98.27 in Europe due to dollar's broad-based strength and climbed to 98.51 in New York after the release of a slew of better-than-expected U.S. economic data.
U.S. jobless claims came in at 331K, versus the forecast of 332K, whilst GDP came in at 2.5%, also better than the forecast of 2.2%.
The single currency traded narrowly below 1.3345 in Asia and then fell sharply to 1.3253 in European morning on dollar's strength together with the comments from ECB's Rehn as he said 'GDP data confirm beginnings of gradual but still subdued recovery; premature to say the least to pronounce that crisis is over.' The pair eventually extended intra-day weakness to a fresh 1-week low at 1.3220 in New York morning due to the upbeat U.S. economic data before stabilising.
Despite cable's brief rise to 1.5548 in Asian morning, failure to penetrate resistance levels at 1.5553/56 prompted selling in pound, price ratcheted lower to 1.5499 in Europe and then 1.5482 in New York morning before trading sideways for rest of the day.
In other news, ECB's Nowotny said 'deposits at ECB show enormous sums, reflect uncertainty but money markets starting to work; central banks' forward guidance plays role given very low growth rates, high uncertainty.' BOE governor Carney said 'U.K. can't devalue its way to prosperity; raising rates too soon would choke recovery.' EU's Rehn noted unemployment crisis in many EU countries and said 'Germany, France hold key to EU economy rebalancing.'
On the data front, German unemployment change in August increased 7K, more than the expectation of a decline of 5K whilst unemployment rate in Aug remained at 6.8%, same as expectation. Germany CPI came in at 0.0% m/m and 1.5% y/y, versus the forecast of 0.1% and 1.7%. HICP was released at 0.0% m/m and 1.6% y/y, versus the forecast of 0.1% and 1.7% respectively.
Data to be released on Friday:
Japan manufacturing PMI, household spending, unemployment rate, CPI, industrial production, housing starts, Swiss KOF indicator, U.K. nationwide house price, mortgage approvals, Germany retail sales, EU economic sentiment, business climate, consumer confidence, unemployment rate, CPI, Italy unemployment rate , CPI, HICP, PPI, Canada GDP, U.S. personal income, personal spending, PCE index, Chicago PMI and University of Michigan consumer confidence.
Dollar strengthens broadly on upbeat U.S. jobless claims and GDP
The greenback advanced broadly on Thursday as better-than-expected U.S. jobless claims and GDP data showed U.S. economy is growing with a firm undertone.
Versus the Japanese yen, although the greenback fell from Asian top at 97.91 to 97.45, the rebound in Japanese equities lifted the pair, price rose above 97.91 to 98.27 in Europe due to dollar's broad-based strength and climbed to 98.51 in New York after the release of a slew of better-than-expected U.S. economic data.
U.S. jobless claims came in at 331K, versus the forecast of 332K, whilst GDP came in at 2.5%, also better than the forecast of 2.2%.
The single currency traded narrowly below 1.3345 in Asia and then fell sharply to 1.3253 in European morning on dollar's strength together with the comments from ECB's Rehn as he said 'GDP data confirm beginnings of gradual but still subdued recovery; premature to say the least to pronounce that crisis is over.' The pair eventually extended intra-day weakness to a fresh 1-week low at 1.3220 in New York morning due to the upbeat U.S. economic data before stabilising.
Despite cable's brief rise to 1.5548 in Asian morning, failure to penetrate resistance levels at 1.5553/56 prompted selling in pound, price ratcheted lower to 1.5499 in Europe and then 1.5482 in New York morning before trading sideways for rest of the day.
In other news, ECB's Nowotny said 'deposits at ECB show enormous sums, reflect uncertainty but money markets starting to work; central banks' forward guidance plays role given very low growth rates, high uncertainty.' BOE governor Carney said 'U.K. can't devalue its way to prosperity; raising rates too soon would choke recovery.' EU's Rehn noted unemployment crisis in many EU countries and said 'Germany, France hold key to EU economy rebalancing.'
On the data front, German unemployment change in August increased 7K, more than the expectation of a decline of 5K whilst unemployment rate in Aug remained at 6.8%, same as expectation. Germany CPI came in at 0.0% m/m and 1.5% y/y, versus the forecast of 0.1% and 1.7%. HICP was released at 0.0% m/m and 1.6% y/y, versus the forecast of 0.1% and 1.7% respectively.
Data to be released on Friday:
Japan manufacturing PMI, household spending, unemployment rate, CPI, industrial production, housing starts, Swiss KOF indicator, U.K. nationwide house price, mortgage approvals, Germany retail sales, EU economic sentiment, business climate, consumer confidence, unemployment rate, CPI, Italy unemployment rate , CPI, HICP, PPI, Canada GDP, U.S. personal income, personal spending, PCE index, Chicago PMI and University of Michigan consumer confidence.
