[B]Market Review[/B] - 10/02/2014 [I]22:57GMT[/I]
[B]Dollar remains under pressure ahead of Fed’s chairman Yellen first testimony[/B]
The greenback traded mixed but with a soft bias against the other major currencies in thin trade on Monday as last Friday’s downbeat non-farm payrolls report continued to dampen demand for the greenback. Investors are reluctant to add bets ahead of Fed’s chairman Yellen first testimony before Congress on Tuesday and Thursday.
During the day, although euro opened lower at 1.3609 in New Zealand on Monday and then traded sideways in Asia, price rebounded in European morning and rose above last Friday’s high of 1.3649 to 1.3652. Later, selling in euro crosses together with the worse-than-expected French manufacturing production and Italian industrial production pressured price to 1.3623 before moving sideways in New York trading.
Official data showed that French industrial production fell 0.3% in December, compared to expectations for a decrease of 0.2%. Industrial production in November was revised down to a 1.2% increase from a previously estimated 1.3% rise. A separate report showed that Italian industrial production fell in December after three straight gains, with a decline of 0.9%, compare to consensus forecast of a reading of 0.0%.
Versus the Japanese yen, despite dollar initial rise above last Friday’s high of 102.58 to 102.65 in Australia, active buying of yen crosses knocked price down to 102.07 in European morning and then lower to 101.99 in New York morning. However, price pared intra-day losses and recovered to 102.27 near New York closing.
Cable moved sideways in Asia and then rose above last Friday’s high of 1.6418 to 1.6428 ahead of European opening. Price later dropped to 1.6384 on cross-selling of sterling versus yen and euro in European morning and then moved around 1.6400 level for rest of the day.
In other news, EU’s economic chief Olli Rehn says ‘ECB still has big bazooka with plenty of ammunition after German court ruling; appropriate that an EU court should have final says over ECB as an EU institution; ECB should take decisions to ensure it meets its inflation target, better supporting euro zone economy; current 0.8% euro zone inflation is “quite far from ECB’s self-set target”.’