[B]Market Review - 03/06/2013 [I]22:36GMT[/I][/B]
[B]Dollar falls broadly due to weak U.S. ISM data[/B]
The greenback fell sharply against others peers on Monday as the report showed the manufacturing sector in U.S. contracted for the first time in six months, dampening expectations that the Federal Reserve will reduce its stimulus program.
Although the single currency edged higher in Asia and rose to 1.3043 in European morning after the release of better-than-expected manufacturing German n Eurozone PMI data, price fell to an intra-day low at 1.2956 in New York morning on cross selling of euro versus other currencies, however, dollar’s broad-based weakness due to the weak U.S. ISM manufacturing (49.0 versus the forecast of 50.5) pushed the pair above said 1.3043 to session high of 1.3108 before retreating.
German and eurozone manufacturing PMI in May came in at 49.4 and 48.3, better than street forecast of 49.0 and 47.8 respectively.
Versus the Japanese yen, the greenback fell from Asian high at 100.73 due to renews decline in Japan’s Nikkei-225 and cross buying of yen pressured the pair to 100.03 in Europe before recovering briefly to 100.51. However, dollar’s broad-based selloff sent the pair further lower to a 3-week low at 98.86 in New York morning before staging a recovery in U.S afternoon on the news that the Japanese government began review of pension investment fund.
The British pound ratcheted higher in tandem with euro in Asia and rose to 1.5289 in European morning due partly to the better-than-expected U.K. manufacturing PMI (51.3 versus the expectation of 50.2) and then retreated to 1.5236. However, dollar’s broad-based weakness pushed the pair above said 1.5289 to a high at 1.5376 in New York morning before retreating.
In other news, Fitch cut Cyprus’s long-term foreign currency issuer default rating to ‘B-’ from ‘B’ with a negative outlook. Fitch said ’ “high risk” of EU/IMF program “going off track” in Cyprus.’ Fed’s Lockhart said ‘FOMC backs stimulus amid varying QE views; Fed officials need to sort out mixed QE message; favor considering QE reduction in Aug or Sep; Fed officials sent “mixed message” on future QE pace; investors incorrect to expect QE to be yanked; reducing QE would not be an exit from bonding buying; approaching a period to consider reducing QE.’
[B]Data to be released on Tuesday : [/B]
Australia current account, RBA rate decision, UK BRC retail sales, house prices, construction PMI, EU PPI, Canada trade balance, imports, exports, U.S. trade balance and redbook retail sales.
