[B]Market Review[/B] - 22/07/2013 [I]22:25GMT[/I]
[B]Dollar tanks on weak U.S. housing data[/B]
The greenback tanked against other currencies in New York on Monday as the weak U.S. existing home sales supported the expectations that the Federal Reserve will maintain its stimulus measures in the near future. Earlier in Asia, the Japanese yen rose strongly against dollar as investors took profit after Japanese Prime Minister Abe, as expected, won in elections for the upper house of parliament on Sunday.
Versus the Japanese yen, although the greenback opened higher at 100.71 in New Zealand after Japanese Prime Minister Abe’s victory in elections to the upper house of parliament on Sunday, price tanked to 99.61 in Asian morning on profit-taking before staging a recovery to 100.24. Dollar traded narrowly in European morning and then tumbled to 99.28 in New York morning after the release of weaker-than-expected U.S. existing home sales but then recovered to 99.62 at U.S. midday.
U.S. existing home sales in June dropped by 1.2% to 5.08M, versus the expectation of 5.25M.
The single currency rose initially to 1.3169 in Tokyo morning but then edged lower to 1.3144 in European morning. However, renewed buying interest pushed the pair to 1.3192 and euro later penetrated last Thursday’s top at 1.3208 to a near 1-month top at 1.3218 in New York morning before retreating.
The British pound traded narrowly in Asian session and rose in tandem with euro to 1.5341 in European morning. Later, dollar’s broad-based weakness pushed cable to a fresh 3-week high at 1.5385 in New York morning before stabilizing.
In other news, German Bundesbank said ‘German economy grew strongly in Q2, more moderate growth expected in Q3.’ Portugal PM Pedro Passos Coelho said ‘austerity is imposed by country’s difficult circumstances; political crisis has dented confidence; we want to complete bailout programme as agreed in mid-2014; we need great political unity.’ BoJ board member Sato said ‘BoJ does not rule out additional policy steps; BoJ won’t hesitate fine-tuning policy flexibly if unexpected risks to economy materialize.’
On the data front, U.S. Chicago Fed index in June came in at -0.13, worse than the forecast of 0.00.
[B]Data to be released on Tuesday: [/B]
France consumer confidence, U.K. mortgage approvals, EU consumer confidence, Canada retail sales, U.S. retail sales, house price index.