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Market Review - 17/10/2013 22:19GMT
Dollar weakens broadly despite U.S. budget agreement deal
The greenback tumbled broadly on Thursday as concerns over the effects of the U.S. government shutdown on the nation's economy weighed on the currency, despite news of a budget agreement to raise the debt ceiling, averting a default.
The single currency found support at 1.3516 in Australia and then ratcheted higher in Asian trading, price penetrated Wednesday's high at 1.3567 in Europe on speculation of U.S. government shutdown will damp growth and prompt the Federal Reserve to postpone tapering its stimulus program. Euro eventually rose to a fresh 8-month peak at 1.3682 in New York morning before easing due to some profit-taking.
Versus Japanese yen, although dollar briefly rose to 99.01 in Asian morning, cross-buying of yen pressured price there and dollar dropped to 97.81 in Europe due to greenback's broad-based weakness and then further to 97.74 in New York morning.
The British pound found support at 1.5940 in Australia and rallied across Asia and Europe due to dollar's broad-based weakness on worries over U.S. economy. The release of stronger-than-expected U.K. retail sales pushed price higher to 1.6097 and cable later rose further to 1.6173 in New York session before easing. U.K. retail sales (September) came in at 0.6% m/m and 2.2% y/y, better than economists’ forecast of 0.4% and 2.1% respectively.
In other news, Federal Reserve Bank of Dallas's President Richard W. Fisher said 'Fed can't deliver on full employment mandate unless U.S. congress, president fix fiscal "mess"; Wednesday's deal to end U.S. debt crisis does not solve fiscal problems, only postpones them; there is little remaining tolerance for U.S. fiscal malfunctioning; looking to Fed to solve U.S. economic ill could make situation worse; bond market starting to show United States the "back of it hand"; Fed will take "all appropriate measures" to preserve money market stability in times of acute stress; any Fed action to prevent market disruptions should not be seen as a fiscal fix; no amount of Fed bond-buying can offset U.S. fiscal "rot".'
On the data front, U.S. initial jobless claims came in at 358K, worse than the expectation of 335K, previous reading is revised to 373K. Philadelphia Fed index in October came in at 19.8, better than the forecast of 15.0.
Data to be released on Friday:
China GDP, industrial production, retail sales and fixed asset investing urban, Canada CPI.
Dollar weakens broadly despite U.S. budget agreement deal
The greenback tumbled broadly on Thursday as concerns over the effects of the U.S. government shutdown on the nation's economy weighed on the currency, despite news of a budget agreement to raise the debt ceiling, averting a default.
The single currency found support at 1.3516 in Australia and then ratcheted higher in Asian trading, price penetrated Wednesday's high at 1.3567 in Europe on speculation of U.S. government shutdown will damp growth and prompt the Federal Reserve to postpone tapering its stimulus program. Euro eventually rose to a fresh 8-month peak at 1.3682 in New York morning before easing due to some profit-taking.
Versus Japanese yen, although dollar briefly rose to 99.01 in Asian morning, cross-buying of yen pressured price there and dollar dropped to 97.81 in Europe due to greenback's broad-based weakness and then further to 97.74 in New York morning.
The British pound found support at 1.5940 in Australia and rallied across Asia and Europe due to dollar's broad-based weakness on worries over U.S. economy. The release of stronger-than-expected U.K. retail sales pushed price higher to 1.6097 and cable later rose further to 1.6173 in New York session before easing. U.K. retail sales (September) came in at 0.6% m/m and 2.2% y/y, better than economists’ forecast of 0.4% and 2.1% respectively.
In other news, Federal Reserve Bank of Dallas's President Richard W. Fisher said 'Fed can't deliver on full employment mandate unless U.S. congress, president fix fiscal "mess"; Wednesday's deal to end U.S. debt crisis does not solve fiscal problems, only postpones them; there is little remaining tolerance for U.S. fiscal malfunctioning; looking to Fed to solve U.S. economic ill could make situation worse; bond market starting to show United States the "back of it hand"; Fed will take "all appropriate measures" to preserve money market stability in times of acute stress; any Fed action to prevent market disruptions should not be seen as a fiscal fix; no amount of Fed bond-buying can offset U.S. fiscal "rot".'
On the data front, U.S. initial jobless claims came in at 358K, worse than the expectation of 335K, previous reading is revised to 373K. Philadelphia Fed index in October came in at 19.8, better than the forecast of 15.0.
Data to be released on Friday:
China GDP, industrial production, retail sales and fixed asset investing urban, Canada CPI.
