[B]Market Review[/B] - 29/07/2013 [I]22:40GMT[/I]
[B]Dollar strengthens broadly ahead of Fed meeting[/B]
The greenback rose against its peers Monday on increased expectations that the Federal Reserve will reiterate their plan at this week’s FOMC meeting to reduce stimulus measures if the economy continues to show signs of improvement.
The single currency went through a roller-coaster session on Monday. Despite initial brief retreat from Australian high at 1.3294 to 1.3261, the pair staged a rebound to 1.3295 in European session. However, failure to penetrate Friday’s 1-month top at 1.3297 triggered profit-taking and price later weakened to 1.3239 in New York morning before recovering to 1.3272 in U.S. afternoon.
Versus the Japanese yen, the greenback dropped to 97.64 in Asian morning due to the a sharp selloff in Japanese Nikkei-225 index but then staged a recovery to 98.11 in European morning. Later, despite brief fall to 97.67, failure to penetrate said Asian low prompted short-covering and priced rebounded to 98.18 in New York morning after the release of U.S, pending home sales before falling again to 97.74 in U.S. afternoon.
U.S. pending home sales in June came in at -0.4% m/m, versus the forecast of -0.1% and the revised reading of 5.8% in May.
Although the British pound dropped from Asian top at 1.5404 to 1.5365 in European morning, cross buying of sterling versus euro lifted the pair to 1.5414. However, the pair dropped sharply in tandem with euro to a low of 1.5329 in New York morning before staging a recovery in U.S. afternoon.
In other news, BoJ Governor Haruhiko Kuroda said ‘don’t think raising sales tax in two steps will hurt economic growth; important for Japan government to pursue fiscal discipline; if BoJ’s QE is seen as financing debt, this could lead to rise in yields; need to monitor impact of said monetary policy on emerging markets; BoJ’s QE so far is working well to end deflation.’ IMF said ‘complete fourth review of Greek program, approve $2.29 billion disbursement for Greece.’
[B]Data to be released on Tuesday : [/B]
Japan household spending, unemployment rate, industrial production, Australian building approvals, German consumer confidence, HICP, CPI, EU economic sentiment, business climate, consumer confidence, Canada CPI, U.S. retail sales, S&P home price index, consumer confidence.