[B]Market Review[/B] - 23/07/2013 [I]22:31GMT[/I]
[B]Dollar falls broadly on weak Richmond manufacturing index[/B]
The greenback fell against its peers on Tuesday as weak U.S. Richmond Fed manufacturing index fuelled expectation that the Federal Reserve will keep its stimulus measures in this year.
Although the single currency rose initially to 1.3207 in Asian morning, the pair retreated to 1.3164 in European morning but then penetrated Monday’s top at 1.3218 to 1.3230 in New York morning after the release of weak Richmond Fed manufacturing index, price later climbed to 1.3239 in U.S. afternoon on dollar’s broad-based weakness.
U.S. Richmond Fed manufacturing index came in at -11, much weaker than the forecast of 9.
Versus the Japanese yen, although the greenback piereced through Monday’s low at 99.28 briefly to 99.14 in Asian morning, short-covering due to the rebound in Japan’s equities lifted price to 99.65 before edging lower to 99.34. Later, the pair rose strongly to 100.18 in Europe on active cross selling of yen versus euro but then dropped sharply to 99.41 in New York afternoon on dollar’s broad-based weakness.
The British pound traded narrowly in Asia and rose briefly to 1.5382 in European morning. However, failure to penetrate Monday’s top at 1.5385 prompted profit-taking and price retreated to 1.5326 in New York morning before rising to fresh 3-week top at 1.5392 in U.S. afternoon.
On the data front, U.S. home price index came in at 0.7%, worse than the forecast of 0.8%. Eurozone consumer confidence improved to -17.4 in July from -18.8 in June, better than the forecast of -18.3.
In other news, Japan PM Abe’s advisor Hamada said ‘Japan should have 4% annualized GDP growth for two more quarters before going ahead with sales tax hike; benefits from “abenomics” may be eroded if Japanese raises sales tax as scheduled.’
[B]Data to be released on Wednesday : [/B]
New Zealand trade balance, export, import, Australia CPI, Japan trade balance, export, import, China HSBC manufacturing PMI, France Manufacturing PMI, Service PMI, German Manufacturing PMI, Service PMI, EU Manufacturing PMI, Service PMI, U.K. CBI industrial trend, U.S. Markit PMI, New home sales.