[B]Market Review[/B] - 02/01/2014 [I]22:30GMT[/I]
[B]Euro weakens on economic recovery concerns[/B]
The single currency weakened against the dollar on Thursday, as the release of mixed manufacturing activity reports from the euro zone added to concerns over the strength of the economic recovery in the region.
During the day, despite euro’s initial rise to 1.3776 in Asian morning, renewed selling interest capped intra-day gain there and price later fell to 1.3716 in European morning and then further to 1.3630 on risk aversion in New York trading before stabilizing.
France’s manufacturing PMI fell to a 7-month low of 47.0 in December, from 47.1 in November, compared to expectations for the index to remain unchanged. A separate report showed Germany’s manufacturing PMI rose to a 30-month high of 54.3 in December, from a reading of 54.2 the previous month.
Versus the yen, U.S. dollar traded sideways in Asian session and before rising above Monday’s high at 105.41 to a fresh 5-year high at 105.45 near European midday, however, profit-taking pressured and risk aversion on falling U.S. equity markets pressured price lower in New York trading and price dropped to 104.55 before stabilizing.
U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending December 28 declined by 2,000 to a seasonally adjusted 339,000.
Although cable rose to fresh 2-year high at 1.6605 in Asian trading, lack of follow through buying prompted profit-taking and the British pound later dropped to 1.6540 after the release of weaker-than-expected U.K. manufacturing PMI before tumbling to 1.6410 in New York morning on broad-based strength in greenback.
U.K. manufacturing PMI came in at 57.3 in December, weaker than the forecast of 58.1.
[B]Data to be released on Friday: [/B]
China non-manufacturing PMI, Swiss KOF indicator, PMI, U.K. construction PMI, mortgage approvals, CPI, HICP on Friday. Financial markets in Japan and China will be closed due to public holiday.