[B]Market Review[/B] - 08/08/2013 [I]22:27GMT[/I]
[B]Dollar rebounds against yen on short-covering[/B]
The greenback recovered against yen in New York session on Thursday on short-covering, despite early decline to a fresh 7-week low of 95.81 due to speculation that the recent economic data cannot support the Federal Reserve to reduce its stimulus measures in the near future.
Earlier in Asia, although dollar yen staged a brief rebound to session high at 96.95 in Asian morning, price dropped to 96.10 at European open after Bank of Japan left its interest rate unchanged at 0.10% and refrained from adding further stimulus measures. Price briefly recovered to 96.47 at New York open, however, a small increase in the U.S. weekly jobless claims pressured price to a fresh 7-week low at 95.81 in New York morning before staging a strong rebound to 96.75 in U.S. afternoon.
U.S. initial jobless claims came in at 333K, versus the expectation of 336K. The previous reading was revised to 328K.
The single currency traded with a firm undertone in Asia and rose above Wednesday’s top at 1.3347 to 1.3369 in European morning, helped by the release of better-than-expected Chinese data. Euro continued to ratchet higher on dollar’s broad-based weakness and rallied to fresh 7-week high at 1.3401 in New York afternoon.
China exports and imports were reported better-than-exected at 5.1% and 10.9% vs forecasts of 2.0% and 1.0% respectively.
The British pound also traded with an undertone in Asia and rose to 1.5519 in European morning before rallying to an intra-day high at 1.5574 in New York morning on dollar’s broad-based weakness.
In other news, BOJ’s Kuroda in his post-rate announcement press conference, said ‘loosening of fiscal discipline may diminish impact of monetary easing; board members wanted to see more hard data showing improvement in capital expenditure; price trend improving for various goods on robust personal spending; BOJ will take appropriate action if tail risk threatens achievement of BOJ price target.’
On the data front, German trade balance in Jun came in at 16.9B, vs expectation of 14.9B, previous reading is revised to 13.6B. Swiss unemployment rate in Jul came in at 3.2%, same as expectation.
[B]Data to be released on Friday : [/B]
Japan tertiary industry index, consumer confidence, China CPI, PPI, industrial production, fixed asset invest urban, retail sales, France industrial production, manufacturing production, Italy trade balance, CPI, HICP, U.K. trade balance, Canada housing starts, unemployment rate, net change in unemployment, U.S. wholesale inventories, wholesale sales.