[B]Market Review[/B] - 21/11/2013 [I]23:52GMT [/I]
[B]Dollar climbs to a 4-month high against yen on Fed tapering and rising U.S. treasury yields[/B]
The greenback rose to a fresh four-month peak versus the yen on Thursday despite mixed U.S. economic data after the minutes of the Federal Reserve’s latest meeting indicated that stimulus tapering could begin in the next few months. The benchmark U.S. 10-year treasury yield climbed to 2.8%.
Versus the Japanese yen, dollar traded with a firm undertone in Asia and rose to 100.85 in European morning, helped by BoJ stuck to its pledge to expand the monetary base at a policy meeting today. Price eventually rose to a fresh 4-month peak at 101.17 in New York morning after the release of better-than-expected U.S. jobless claims.
U.S. jobless claims came in better-than-expected at 323K versus forecasts of 335K. The Federal Reserve Bank of Philadelphia said that its manufacturing index fell to 6.5 in November, from 19.8 in October
Although the single currency remained under pressure in Asia and dropped to session low at 1.3400 in European morning due to weaker-than-expected French manufacturing and services PMI, price pared intra-day losses and rose to session high at 1.3477 ahead of New York open as European Central Bank President Mario Draghi dampened speculation of negative deposit rates. Later, euro moved marginally higher to 1.3487 before easing in New York afternoon trading.
France Manufacturing PMI in Nov came in at 47.8, worse than the forecast of 49.5. France Service PMI came in at 48.8, worse than the forecast of 51.0.
The ECB’s President Mario Draghi said ‘Don’t try to infer anything from what I say, anything about the possibility of negative rates; this was discussed in the last monetary-policy meeting and there’s no more news since then.’
Although the British pound retreated in tandem with euro in Asia to session low at 1.6072, price found buying interest there and rose to 1.6141 at New York open and then later above Wednesday’s 1.6178 high to 1.6200 near the close.
In other news, German FinMin Wolfgang Schaeuble said ‘monetary policy cannot be the only way out of crisis, ECB mandate must remain limited; monetary policy must not promote false stimulus.’
[B]Data to be release on Friday:[/B]
Japan BoJ monthly economic report, Germany GDP, export, import, Ifo current assessment, Ifo business climate, Canada CPI and retail sales.