[B]Market Review - 28/03/2013[/B] [I][B]22:49GMT[/B][/I]
[B]Euro rises on short-covering and quarter-end positioning[/B]
The euro pared recent losses and rose against the dollar on Thursday on short-covering and month- and quarter-end positioning.
Earlier in Asia, although the single currency traded with a steady tone and recovered to 1.2815 in early European morning, price dropped briefly but sharply to 1.2755 after release of poor Germany unemployment data. However, failure to penetrate yesterday’s 4-month low at 1.2750 triggered broad-based short covering and euro rallied to session high at 1.2845 in New York morning before retreating, euro traded around 1.2816 near New York close.
Germany unemployment change came in worse-than-expected at 13K vs forecasts of -4K.
The British pound strengthened to 1.5150 in Asian morning before rising further to 1.5176 in European morning, however, price dropped briefly but sharply to an intra-day low at 1.5112 on active cross-selling of sterling versus euro (eur/gbp rose from 0.8416 to 0.8476). Later, cable pared intra-day losses and rallied in tandem with euro to session high at 1.5201 in New York morning, due partly to the rise in U.S. equities, price maintaied a firm undertone and traded around 1.5193 near New York close.
Versus the Japanese yen, the greenback came under selling pressure in Asian morning and dropped below Wednesday’s 94.02 low to 93.98. Despite a brief rebound to 94.26 in European morning, dollar met renewed selling there and fell to session low at 96.88. Later, price pared intra-day losses and recovered to 94.39 on cross-selling in yen, however, dollar’s broad-based weakness in New York morning due to the rise in U.S. weekly jobless claims pressured the pair to 93.96, however, dollar ratcheted higher in New York afternoon.
In other news, Italy economy minister Vittorio Grilli said ’ govt believes that even with revision of deficit targets can emerge fm excessive deficit procedure; will monitor budget to ensure deficit remains within 3%/GDP EU limit.’ EU commission said ‘imposing capital controls in Cyprus justified, in the public interest¡F restrictive measures to remain in force for seven days; wil monitor need to revise or extend capital control measures for Cyprus.’
On the data front, U.S. jobless claims rose to 357K from 332K previously, U.S. annualised GDP Q4 came in at 0.4% vs forecasts of 0.5% and previous reading of 0.1%. Chicago PMI was reported at 52.4, lower than expectations of 56.2.
[B]Data to be released on Friday: [/B]
Japan’s National CPI, Tokyo CPI and industrial production; U.S. personal income, PCE and University of Michigan consumer confidence.