[B]Market Review[/B] - 17/02/2014 [I]22:51GMT [/I]
[B]Euro climbs to 3-week high in subdued trade on Monday[/B]
The single currency rose to a fresh 3-week high at 1.3724 against the dollar on Monday, as Friday’s better-than-forecast data on euro zone fourth quarter growth continued to underpin demand for the common currency, however, price later eased to 1.3693 in quite North American session as some investors took profit due to U.S. Presidents Day holiday.
Versus the Japanese yen, although dollar dropped initially below Friday’s low at 101.57 to 101.39 at Tkyo open after official data showed that Japan’s gross domestic product expanded 0.3% in the final three months of 2013 and grew 1.0% on a year-over-year basis, cross-selling of yen due to rebound in Nikkei index lifted price higher to 101.99 in European morning. Later, price moved in a narrow range of 101.83-101.99 for rest of the day.
Although cable continued its recent ascent in Asia on Monday and rallied to a fresh 4-year peak at 1.6823, lack of follow through buying and broad-based long liquidation of sterling pressured price lower to 1.6767 ahead of European open. Later, cable dropped further to 1.6720 and then 1.6694 in quite North American session.
On the data front, Rightmove said on Monday that the average selling price for houses in the U.K. was up 3.3% in February, from a 1.0% hike in January. On an annual basis, house prices spiked 6.9%, from an annual rate of 6.3% in January, the largest annual jump since February 2007.
In other news, ECB Governing Council member Ewald Nowotny said in London on Monday that ‘ECB is not fulfilling its price stability goal; inflation forecast may show 2015 inflation may be below 2%; there might be good argument to wait and see on interest rates; ECB’s OMT bond-buying programme “not that relevant” anymore because of improved European situation; negative deposit rate is one possible policy element but no decision made; sees improvements in real economy, need to discuss link to inflation rates.’
[B]Data to be released on Tuesday: [/B]
Australia RBA minutes, Japan machinery tool orders, Italy trade balance, EU current account, UK CPI, RPI, Germany ZEW current situation, ZEW survey expectations, U.S. empire manufacturing, net long-term TIC flows, total net TIC flow and NAHB housing market index.