[B]Market Review[/B] - 24/10/2013 [I]23:29GMT [/I]
[B]Euro strengthens on speculation that Fed will delay tapering stimulus[/B]
The single currency rose to a fresh near 2-year high at 1.3826 on concerns the Federal Reserve will delay plans to start tapering bond buying programme outweighed soft euro zone data.
Eurozone PMI manufacturing in October came in at 51.3, worse than the forecast of 51.4.Euro zone PMI service in October came in at 50.9, worse than the expectation of 52.4.
The single currency found renewed buying at 1.3775 in Australia and then climbed to 1.3822 at European open before retreating to session low at 1.3764 due to weaker-than-expected German Service PMI (52.3 versus forecast 53.9). However, renewed cross-buying of euro especially versus sterling lifted price and euro rose to a fresh near 2-year high at 1.3826 in New York morning and later traded sideways in New York afternoon.
Versus Japanese yen, the greenback fell to 97.17 in Asian trading but failure to penetrate Wednesday’s low prompted profit-taking and the pair rebounded to intra-day high of 97.62 ahead of European open partly due to Japan’s Prime Minister Shinzo Abe’s comments. However, renewed selling interest pushed price lower in European trading, price later retreated to 97.23 in New York morning.
Japanese Prime Minister Shinzo Abe said ‘wages fell further than prices amid deflation; will continue to ask companies to raise wages; will refer to various indices in deciding on 10% sales tax; wants to make an appropriate decision on 10% sales tax; sales tax decision will take into account 2014 3Q growth.’
The British pound rose to 1.6223 at European open but selling interest met there and pressured price lower. Cable later fell to a session low at 1.6138 in New York morning before staging a strong rebound to 1.6211 in New York afternoon.
In other news, ECB’s executive board member Yves Mersch said 'new long-term LTRO might not be necessary; all options are open, have very extensive toolbox; national backstop necessary but some countries have limited means’
On the data front, U.S. Markit PMI in October came in at 51.1, weaker than the forecast of 52.5. U.S. initial jobless claims came in at 30K, worse than the economists’ forecast of 340K, previous reading was revised to 362K. U.K. CBI industrial trend in October came in at -4, lower than the expectation of 10.
[B]Data to be released on Friday: [/B]
Japan national CPI, Tokyo CPI, Germany Ifo current assessment, Ifo business climate, U.K. GDP, U.S. durable goods, University of Michigan consumer confidence, wholesale sales and wholesale inventories.