[B]Market Review[/B] - 14/08/2013 [I]22:50GMT[/I]
[B]Euro little changed despite strong GDP in the eurozone and Germany[/B]
The single currency moved in a tight range on Wednesday despite the fact that eurozone and Germany GDP data beat forecast and showed economy of the area is coming out from recession.
Earlier in the day, euro traded narrowly in Asia and then rose briefly to 1.3280 after the release of better-than-expected German GDP (0.7% q/q and 0.9% y/y versus the forecasts of 0.6% and 0.7%), however, the release of stronger-than-expected eurozone GDP (0.3% q/q and -0.7% y/y versus the forecasts of 0.2% and -0.8%) did not help the pair and euro later dropped to session low at 1.3239 in European morning before staging a rebound to 1.3271 in New York morning on dollar’s broad-based weakness due partly to the lower-than-expected U.S. PPI (0.0% m/m and 2.1% y/y versus the expectations of 0.3% and 2.4%).
Versus the Japanese yen, the greenback retreated initially from Tuesday’s top at 98.34 to 97.87 in Asia but cross selling of yen versus euro lifted the pair above 98.34 to 98.43 in European morning, dollar’s broad-based weakness after release of U.S. PPI pressured price to 97.96 in New York morning before recovering.
Although the British pound also traded narrowly in Asian morning and then dropped briefly to 1.5423 in European morning, release of upbeat U.K. jobs data lifted price sharply higher from there to 1.5507 and active cross buying of sterling versus euro later pushed price further to a session high of 1.5549 in New York morning before easing.
U.K. claimant change in Jul came in at -29.2K, much better than the forecast of -15.0K. Unemployment rate remains at 7.8%, same as the expectation.
In other news, BoE minutes showed ‘MPC voted 8-1 in favour of forward guidance policy, Weale votes against; BoE’s Weale wanted shorter time horizon for 2.5 CPI knock-out clause than 18-24 months; Weale saw “particularly compelling” need to manage risk that guidance pushes up medium-term inflation expectations; show MPC voted 9-0 to keep QE bond purchase total at 375 bln stg; some members still believe case for more QE compelling, but want to gauge impact of guidance before raising asset purchases; show voted 9-0 to keep rates at 0.5%; most members think U.K. short term market interest rates out of line with economic outlook, some do not.’
[B]Data to be released on Thursday: [/B]
New Zealand PMI, consumer confidence, U.K. retail sales, U.S. jobless claims, Empire state manufacturing, Net LT TIC flows, industrial production, capacity utilization, NAHB housing market index, Philadelphia Fed survey, Canada existing home sales.