[B]Market Review[/B] - 15/10/2013 [I]22:04GMT [/I]
[B]Dollar trades mixed after suspension of U.S. Senate debt talks[/B]
Dollar traded mix versus major currencies on Wednesday as hopes for a deal to raise the U.S. debt ceiling and end the government shutdown diminishing. U.S. Senate Durbin said in New York afternoon that ‘U.S. Senate fiscal negotiations suspended until House Republicans work out plan to proceed on debt limit, government funding.’
The single currency found support at 1.3550 in Asian trading and then rose to session high at 1.3571 in European morning. However, a growing optimism on U.S. debt ceiling deal pushed euro lower to a fresh 2-week trough at 1.3479 in European midday before stabilizing. Euro later rebounded to 1.3536 near New York close on news that U.S. Senate fiscal negotiations had suspended.
The British pound swung from gains to losses, Price initially dropped below Monday’s low at 1.5955 to 1.5952 in Asian morning and then rebounded to 1.6010 in European morning after the release of higher-than-expected CPI data, which came in at 0.4% m/m and 2.7% y/y, versus street forecast of 0.3% and 2.6% respectively. However, cable met selling pressure there and price tumbled to a session low of 1.5915 in European midday. However, active broad-based buying of sterling in New York session helped price to recoup intra-day losses and cable climbed back to as high as 1.6000 near New York close.
Versus Japanese yen, despite a brief rise to 98.71 in Australia following rally in previous session, the greenback retreated on renewed cross-buying yen and dropped to 98.37 shortly after European open. Later, dollar rebounded to 98.69 but failure to penetrate said intra-day high prompted profit-taking. Price retreated to 98.39 and then tumbled to an intra-day low at 97.99 near New York close.
In the other news, BoE’s Weale said 'considerable slack in U.K. labor market is exerting downward pressure on inflation; clear movement of half a percentage point in inflation expectation would be significant; ‘forward guidance if not carefully designed can raise inflation expectation; my concerns about inflation expectations are forward guidance remain.’
On the data front, Fed’s Empire state index in October came in at 1.52, vs the forecast of 7.00, the lowest since May. EU ZEW economic sentiment (October) came in at 59.1.Germany ZEW current condition (October) came in at 29.7, worse than the forecast of 31.3.Germany ZEW economic sentiment (October) came in at 52.8, better than the expectation of 49.6.
[B]Data to be released on Wednesday : [/B]
New Zealand CPI, Australia Westpac leading economic index, U.K. claimant count, ILO unemployment rate, Average earnings, Swiss ZEW index, EU trade balance, CPI, U.S. CPI and net LT TIC.