[B]Market Review[/B] - 26/08/2013 [I]21:57GMT[/I]
[B]Dollar rebounds versus yen despite weak U.S. durable goods [/B]
The greenback staged a rebound versus the Japanese yen on Monday, despite the fact that the weak U.S. durable goods raised concerns that the Federal Reserve may not withdraw its stimulus measures in September.
Versus the Japanese yen, despite dollar’s initial gap-down opening to 98.17 in New Zealand, the pair rebounded strongly to 98.85 in Asia partly due to the rise in Japanese equities, however, renewed cross buying of yen versus other currencies pressured the pair to 98.44 in European morning. Later, although the greenback briefly recovered to 98.67, the pair retreated to 98.27 in New York morning after the release of worse-than-expected U.S durable goods before paring intra-day losses.
U.S. durable goods, ex-transportation and ex-defense came in at -7.3%, -0.6% and -6.7%, worse the forecasts of 4.0%, 0.5% n 2.9% respectively.
The single currency edged lower from New Zealand top at 1.3393 and dropped to 1.3364 in European morning on cross selling of euro versus yen. Later, despite a brief dip to 1.3357 in New York morning, the pair rebounded 1.3394 due the worse-than-expected U.S. durable goods before retreating and then traded inside the range for the rest of the day.
The British pound traded narrowly in Asia and rose briefly to 1.5588 in thin European morning due to the U.K. holiday. Later, despite a brief fall to 1.5556 in New Work morning, the pound jumped swiftly to 1.5612 due to dollar’s broad based weakness before retreating.
In other news, ECB’s Weidmann said ‘ECB government bond purchases would weaken countries’ own responsibility to solve problems; best way for ECB to contribute to crisis solution is by preserving price stability; governments bond holding should be capped, backed by sufficient capital similar to corporate bonds.’ BoE’s Bean said ‘forward guidance sends clear signal that rates not likely to rise imminently.’
[B]Data to be released on Tuesday[/B]:
Germany Ifo business climate, current assessment, U.S. retail sales, S&P home price index, consumer confidence on Tuesday.
Haven’t checked how yields did yesterday.