[B]Market Review [/B]- 15/09/2013[B] 23:16GMT[/B]
[B]Dollar ends mixed ahead of Fed meeting[/B]
The greenback was mixed against other major currencies on Friday, after the release of a slew of disappointing U.S. economic reports as investors turned to the Federal Reserve’s upcoming policy meeting next week.
Versus the Japanese yen, despite an initial rebound to 99.98 in Asian morning, cross-buying of yen pressured price lower in European trading and dollar later weakened further in New York morning after release of a slew of disappointing U.S. economic reports, price fell to sessions low of 99.19 in New York afternoon.
U.S. retail sales rose 0.2 percent in August, lower than street forecast for a 0.4 percent increase, after an upwardly revised 0.4 percent gain the previous month, while core retail sales, excluding automobiles, rose 0.1 percent last month, also less than forecast for a 0.3 percent gain, after an upwardly revised 0.6 percent increase in July. Later, the preliminary September consumer sentiment reading from the University of Michigan dropped to 76.8 from previous reading of 82.1 as lenders have hiked mortgage and other interest rates sharply this summer in anticipation of a pullback by the Federal Reserve of one of its major stimulus programs.
The single currency went through a roller-coaster session versus U.S. dollar on Friday. Although the pair came under selling pressre at Asian open on Japanese business daily Nikkei report that former U.S. treasury secretary Lawrence Summers (1999-2001) would likely be named as the next Federal Reserve Chief after the FOMC’s Sept.17-18 meeting, market perceived Summers as less dovish than the other leading contender Janet Yellen. Ben Bernanke’s term as Fed chairman will end in January, 2014.
Euro fell to 1.3264 ahead of European open and then rebounded to 1.3322 in New York morning after the release of weaker-than-expected U.S. retail sales, however, renewed active cross-selling of euro versus yen and the pound pressured knocked price lower and the single currency briefly penetrated Thursday’s low of 1.3256 to 1.3254 but only to climb back above 1.3310 in New York afternoon session.
Eur/jpy tanked from intra-day high of 132.65 and dropped marginally below Thursday’s low at 131.72 to 131.66 in New York morning, whilst eur/gbp tumbled to a fresh 7-month trough at 0.8357 before recovering.
The British pound extended recent upmove Friday and ralled after finding renewed buying at 1.5776 ahead of European open as hopes for the Bank of England to raise interest rates sooner than expected continued to support sterling. Dollar’s broad-based weakness after the release of a slew of disappointing U.S. consumer data pushed cable above Thursday’s high of 1.5840 and the pair later climbed to a fresh 7-month peak at 1.5885 in New York afternoon.
In the other news, Japan government upgraded economic assessment in September, said ‘economy headed toward gradual recovery; upgrades capital expenditure, signs of recovery can be seen in services sector; downgrades assessment of consumer spending and exports; maintains view that end of deflation is approaching.’
[B]Data to be released next week :[/B]
[B]Monday:[/B] U.K. Rightmove house price, Italy trade balance, current account, EU CPI, Canada existing home sales, U.S. empire state manufacturing, industrial production, Capacity utilization. Japan financial market is closed due to public holiday.
[B]Tuesday:[/B] Australia RBA September minutes, EU current account, economic sentiment, trade balance, U.K. PPI, RPI, CPI, ONS house price, Germany economic sentiment, current condition, U.S. CPI, retail sales, Net LT TIC flows, NAHB housing market index.
[B]Wednesday: [/B]Australia leading index, U.K. BOE MPC minutes, Swiss Zew index, U.S. rate decision, housing starts, building permits
[B]Thursday:[/B] New Zealand GDP, Japan trade balance, import, export, all industry index, leading index, U.K. retail sales, CBI industrial trend, Canada wholesale sales, U.S. jobless claim, current account, Philadelphia Fed survey, existing homes sales, leading indicators. China financial market will be close due to public holiday.
[B]Friday:[/B] U.K. PSNCR, public sector net borrowing, EU consumer confidence, Canada CPI. China financial markets will be close due to public holiday.