[B]Market Review[/B] - 26/10/2013 [I]01:21GMT [/I]
[B]Euro hovers near a 2-year high on tepid U.S. economic data[/B]
Euro hovered near a two-year high at 1.3833 on Friday due to the growing speculation on tepid U.S. economic data that the Federal Reserve will refrain from tapering its stimulus program this year continued to weigh on the greenback.
U.S. University of Michigan consumer confidence in October came in at 73.2, worse than the expectation of 75.0. U.S. durable goods in September came in at 3.7%, better than the forecast of 2.0%.
The single currency found support at 1.3785 in Asian morning and rose to a fresh near 2-year high at 1.3833 before Europe opening, however, profit-taking offers there capped euro’s upside and pushed price lower in Europe. Euro later fell to a session low of 1.3774 in New York morning before rebounding to 1.3814.
Versus Japanese yen, the greenback went through a roller-coaster session Friday. The pair met selling interest at 97.43 in Australian morning n dropped to fresh 2-week low of 96.94 ahead of European open due to renewed cross-buying in yen on risk aversion especially against aussie due to a near 3% drop in the Nikkei. Dollar found support there and recovery in the Nikkei future in European session lifted price. Dollar pared intra-day loss and later climbed to session high of 97.49 in New York afternoon.
Although the British pound rose above Thursday’s high at 1.6223 to an intra-day high of 1.6248 in Asian trading, renewed selling interest there pushed price lower ahead of European open. Cable staged a brief rebound to 1.6239 after the release of U.K. GDP before coming off in European. Sterling ratcheted lower to a session low at 1.6150 in New York morning b4 recovering. U.K. GDP in Q3 came in at 0.8% q/q n 1.5% y/y, same as the forecast.
In other news, ECB’s Executive Board member Jorg Asmussen said ‘ECB asset review precondition for revived lending; has no “specific worry” on euro exchange rate; ESM could be temporary backstop for resolution body; his intention is to fulfill term at ECB.’
Japan Finance Minister Taro Aso said ‘need more time for Japan to escape deflation; Japan 2014 July-Sept GDP data will be key in deciding if to proceed with next sales tax hike to 10% in 2015.’
On the data front, Germany’s Ifo business climate in October came in at 107.4, weaker than the expectation of 108.0. Ifo current assessment in October came in at 111.3, worse than the forecast of 111.6.
[B]Data to be released next week: [/B]
U.K. Hometrack housing survey, CBI distributive trades, Germany import price index, retail sales, U.S. industrial production, capacity utilisation, pending home sales on Monday. New Zealand financial market is closed due to public holiday.
Japan unemployment rate, household spending, retail sales, France consumer confidence, U.K. mortgage approvals, Halifax house prices, U.S. PPI, retail sales, Redbook retail sales, S & P/CS home price, consumer confidence, business inventories, Canada PPI on Tuesday.
Japan industrial production, Swiss UBS consumption indicator, KOF indicator, Germany unemployment change, unemployment rate, U.K. Lloyds business barometer, EU business climate, Economic sentiment, consumer confidence, U.S. ADP employment, CPI, Fed FOMC rate decision, Germany HICP, CPI on Wednesday.
New Zealand rate decision, ANZ Business confidence, Australia import price index, export price index, building approvals, Japan manufacturing PMI, BOJ rate decision, housing starts, construction orders, Germany Gfk consumer confidence, France PPI, Italy unemployment rate, CPI, HICP, PPI, EU PPI, unemployment rate, CPI, Canada GDP, U.S. jobless claims, Chicago PMI on Thursday.
Australia PPI, China manufacturing PMI, HSBC Markit manufacturing PMI, Swiss PMI, U.K. manufacturing PMI, U.S. Markit manufacturing PMI, ISM manufacturing and construction spending on Friday. France financial market is closed due to public holiday.