[B]Market Review[/B] - 14/11/2013 [I]22:42GMT [/I]
[B]Yen weakens beyond 100 on intervention remarks from Japan Finance Minister Taro Aso[/B]
Japanese yen weakened against dollar on Thursday, the pair rose above 100 for the first time since September, after earlier comments from Japan Finance Minister Taro Aso, who said “Japan must always be ready to send signal to markets to curb excessive, one-sided forex moves; Japan, as with any country, must set aside necessary reserves to conduct FX intervention when needed.”.
The greenback found support at 99.14 against Japanese yen ahead of Tokyo open and then rose to 99.73 in Asian trading. Dollar rose above Tuesday’s high at 99.80 to 100.04 in European morning, and then climbed to 100.15 in New York morning after the testimony by Fed’s vice chairman Janet Yellen.
The single currency rose to a session high at 1.3499 in Australian morning due to the release of prepared dovish statements from Fed’s Vice Chair Janet Yellen but profit taking below 1.3500 pushed price lower in Asian trading. Euro fell to intra-day low at 1.3418 in European morning after release of weaker-than-expected euro zone Q3 GDP, which came in at 0.1% Q/Q and -0.4% Y/Y, worse than the forecast of 0.2% and -0.3% respectively.
However, short covering lifted euro to 1.3489 in New York after Fed’s Janet Yellen testified to the U.S. Senate Banking Committee.
Fed’s Vice Chair Janet Yellen said 'strongly committed to promoting robust economic recovery; long spells of unemployment are particularly painful for households; imperative to do what we can to promote strong recovery; expects to maintain highly accommodative policy for some time to come as QE winds down; there are dangers in ending QE too early, and in keeping it place too long; important not to remove bond-buying support when recovery is fragile; believes benefits of bond buying exceed costs; as recovery progresses, need to bring policy back to normal in timely fashion, have the tools; bond buying has made meaning contribution to growth, economic outlook; QE not on a set course, data dependent; QE will not continue forever; says for pace of QE, looking for signs of strong enough growth to continue progress in economy; no set time on determining when to reduce bond buying; weak demand for goods, services is major drag on economy.’
The British pound retreated to 1.6027 in Asian trading and then dropped to 1.5988 in European morning after the release of weaker-than-expected U.K. retail sales. However, renewed buying interest there lifted price higher in New York morning and climbed to a session high at 1.6101 on Fed’s Janet Yellen’s comments.
U.K. retail sales in October came in at -0.7% m/m and 1.8% y/y, worse than the forecast of 0.0% and 3.1% respectively.
On the data front, Germany GDP in Q3 came in at 0.3% q/q and 1.1% y/y, same as the expectation. France GDP in Q3 came in at -0.1% q/q and 0.2% y/y, lower than the forecast of 0.0% and 0.3% respectively. U.S. initial jobless claim came in at 339K, worse than the forecast of 330K, previous reading was revised to 341K.
[B]Data to be released on Friday: [/B]
Italy trade balance, current account, EU CPI, U.S. export price index, import price index, Empire State manufacturing, industrial production, capacity utilisation, wholesale inventories, wholesale sales and Canada existing home sales.