[B]Market Review[/B] - 05/08/2013 [I]22:44GMT[/I]
[B]Dollar falls vs yen on lowered expectation of Fed tapering[/B]
The greenback remained under pressure vs the yen and dropped further after the weaker-than-expected U.S. payrolls on Friday lowered expectations that the Federal Reserve would start tapering its bond purchases.
Although the greenback briefly rebounded to session high at 99.15 at Asian open, renewed selling knocked the pair lower in Asian morning and price dropped to 98.30 in European morning. Dollar pared intra-day losses and recovered ahead of New York open before rising briefly to 98.78 after the release of better-than-expected U.S. ISM non-manufacturing, however, price dropped to 98.18 near New York close.
U.S. non-manufacturing PMI in Jul came in at 56.0, much better than the forecast of 53.0.
The single currency remained under pressure in New Zealand and Australian sessions and retreated to 1.3263 in Asian morning, however, price staged a rebound ahead of European open and rose to session high at 1.3301 in European morning after the release of better-than-expected Italy and France services PMI. Intra-day weakness in eur/gbp checked euro’s gains and pressured price lower to an intra-day low at 1.3233 in New York morning on cross selling of euro before rebounding to 1.3266 in New York afternoon.
Italy and France Service PMI in Jul came in at 48.7 and 49.1, better than the forecasts of 46.5 and 48.3 respectively.
The British pound was also under pressure in New Zealand and fell to session low at 1.5259 at Asian open, however, cross-buying of sterling vs euro pushed price higher and cable rose further to an intra-day high at 1.5380 after data showed UK services expanded at the fastest pace in six years in July. Later, price pared intra-day gains and retreated to 1.5320 in New York morning before stabilising.
U.K. Service PMI in July came in at 60.2, much better than the forecast of 57.2.
In other news, Dallas Fed President Richard Fisher said ‘unless we see some disturbing data, we shud start trimming bond buying in September; I personally think wud have been dialing back on bond purchases some time ago; you don’t get considered for the job of Fed chair unless you are high quality; next Fed chairman must be someone willing to do right, no matter what the cost.’
[B]Data to be released on Tuesday: [/B]
Australia trade balance, house price index, RBA rate decision, Japan leading indicators, U.K. BRC retail sales, industrial production, manufacturing production, Italy industrial production, GDP, Germany factory orders, Canada trade balance, import, export, U.S. trade balance, retail sales.