[B]Market Review[/B] - 30/12/2013 [I]22:52GMT [/I]
[B]Dollar retreats broadly on improved market sentiment [/B]
Dollar retreated broadly against other major currencies on Monday, as market appetite improved before the year end. In addition, thin trading volumes due to many investors closing books before year end reduced liquidity in the market and increased volatility, which helped to exaggerate market moves.
The single currency retreated after meeting renewed selling at 1.3770 in Australia and dropped to 1.3729 in Asian trading, however, improved risk appetite lifted price from there and euro ratcheted higher in European trading. Euro later rose to 1.3819 near New York afternoon before easing.
Versus Japanese yen, although the greenback rose to fresh 5-year high at 105.41 in Tokyo morning, profit-taking pressured price from there and the pair later fell to 105.12 in near European midday and then further to 104.97 after release of weaker-than-expected U.S. pending home sales before recovering.
U.S. November pending home sales came in at 0.2% m/m, lower than market expectation of an increase of 1.0%.
Cable traded sideways in Asian trading and then retreated to 1.6460 in European morning. Later, the British pound rose in tandem with euro on the back of dollar’s broad-based softness and climbed to a high of 1.6533 in New York trading.
In the other news, German Finance Minister Wolfgang Schaeuble said ‘low rate policies can’t last forever; sees 1st signals of European money supply declining.’
On the data front, Italy PPI in November came in at -0.1% m/m n -2.3% y/y, previous reading was revised to -1.0% n -2.5% respectively.
[B]
Data to be released on Tuesday:[/B]
U.K. Lloyds business barometer, U.S. Redbook retail sales, S&P home price, Chicago PMI, consumer confidence on Tuesday.