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Market Review[/B] - 06/12/2013 [I]22:24GMT [/I]
[B]U.S. dollar rallies against Japanese yen on strong U.S. jobs report[/B]
U.S. dollar rallied to 102.97 against the Japanese yen on Friday after stronger-than-expected U.S. jobs data, adding speculation that the Federal Reserve may start tapering its bond buying program sooner than expected.
U.S. employers added 203,000 new jobs in November and U.S. jobless rate fell to a five-year low of 7.0%. U.S. University of Michigan consumer sentiment rose to 82.5 in December versus final reading of 75.1 in November.
The single currency briefly dropped to a session low of 1.3620 after the release of U.S. jobs data before rallying to a fresh five-week high of 1.3706 in late New York. ECB chief Mario Draghi, after a policy meeting on Thursday, said the bank was ready to take fresh action to support a fragile recovery. Draghi also noted that liquidity in the banking system had improved since the last long-term cash injection and attached conditions for any repeat.
The British pound fell initially to a session low of 1.6294 in New York morning on dollar’s broad-based weakness after the release of robust U.S. jobs report, however, cable staged a strong rebound to 1.6393 in tandem with euro before retreating again in late New York due to cross selling in sterling. Euro rose against the sterling from 0.8348 to 0.8390.
In other news, Philadelphia Fed President Charles Plosser said ‘the U.S. Federal Reserve should put a dollar cap and end date on its bond-buying program.’ Plosser added “the sooner we end (the program) the better.” Plosser suggested the central bank should convert its existing “thresholds” for raising interest rates to more predictable “triggers.” The Fed has tied its first rate rise to future thresholds of 2.5 percent inflation and 6.5 percent unemployment.
Chicago Fed President Charles Evans said at symposium that ‘the Federal Reserve should not worry too much if inflation temporarily rises above the Fed’s 2 percent goal.’ Evans added ‘inflation is now running much lower than the Fed’s goal, and Fed policies designed to push it back up may possibly overshoot; but the Fed’s goals on inflation and on achieving maximum employment should be “symmetric,” and the Fed should give them equal weight.’ Evans also said he is not willing to used monetary policy to lean against the rise in stock prices that some see as a potential bubble.
[B]Data to be released next week: [/B]
Japan current account, GDP, economic watch DI, China CPI, PPI, Swiss unemployment rate, retail sales, Germany trade balance, import, export, current account, industrial production, EU Sentix investor confidence, Canada housing starts on [B]Monday[/B]
Australia home loans, business confidence, business condition, Japan Tertiary industry index, consumer confidence, , machine tools orders, China industrial production, fixed assets investing urban, retail sales, U.K. RICS house price, industrial production, manufacturing production, trade balance, France industrial production, manufacturing production, Italy industrial production, manufacturing production, GDP, U.S. retail sales, wholesale inventories, wholesale sales on [B]Tuesday.[/B]
Australia consumer confidence, machinery orders, domestic CGPI, Germany CPI, HICP, France current account, U.S. Fed budget on [B]Wednesday.[/B]
New Zealand rate decision, employment change, unemployment rate, France HICP, CPI, Swiss rate decision, EU industrial production, SNB rate decision, Italy CPI, HICP, Canada new housing price, U.S. import price index, export price index, jobless claims, retail sales, business inventories on [B]Thursday.[/B]
New Zealand manufacturing PMI, consumer confidence, Japan industrial production, capital utilization, U.S. PPI on [B]Friday.[/B]