AceTraderForex Dec 5: U.S. dollar falls against Japanese yen on risk aversion

[B]Market Review[/B] - 04/12/2013 [I]21:55GMT [/I]

[B]U.S. dollar falls against Japanese yen on risk aversion[/B]

The greenback fell against the Japanese yen on renewed risk aversion on speculation that the Federal Reserve will reduce stimulus after the release of higher-than-expected ADP employment and new home sales data.

U.S. ADP employment came in at 215,000 vs forecast of 173K and previous reading of 130,000. U.S. Oct trade deficit $40.64 billion versus forecast of $40.0 billion n Sep deficit $42.97 billion. U.S. October new homes sale at end of October 183K units versus Sep 190K units; ISM manufacturing in November came in at 53.9 versus previous reading of 55.4.

U.S. dollar meet renewed selling interest at 102.84 against the Japanese yen in European morning on Wednesday and price tumbled to an intra-day of 101.82 in New York due to active cross buying in jpy. Euro, aussie and sterling fell sharply versus the Japanese yen from 139.59 to 138.45, from 93.72 to 91.80 and from 168.37 to 166.90 respectively.

The single currency fell from 1.3601 to an intra-day low at 1.3529 after the release of stronger-than-expected U.S. economic data and then rebounded strongly to 1.3606 in late New York. On the data front, Germany Service PMI in Nov came in at 55.7, higher than the forecast of 54.5. Eurozone service PMI in Nov came in at 51.2, higher than the forecast of 50.9.

Cable fell in European morning on Wednesday, in fact, sterling came under broad-based selling pressure at European open on long liquidation versus euro & yen. Some stops were tripped when the pound penetrated Asian low at 1.6378 n price quickly tanked to intra-day low at 1.6326 (Reuters) after U.K. Nov services PMI fell below market expectation of 62.0, actual reading came in at 60.0 versus Oct’s 62.5 (16-year high), the data suggests growth in the important service sector is slowing. However, the British pound rebounded to 1.6405 in tandem with euro in New York.

[B]Thursday[/B] will see the release of Australia trade balance, France unemployment rate, U.K. Lloyds employment confidence, BoE rate decision, EU ECB rate decision, U.S. jobless claims, GDP, personal consumption, PCE, durable goods, factory orders, and Canada Ivey PMI.