Dollar Rebounds Broadly After Upbeat US Data
Market Review – 19/09/2013 22:15GMT The greenback pared post-FOMC losses on Thursday, and gained the most against the Japanese yen. The dollar was supported against yen in New York morning due to a slew of upbeat U.S. economic data, including jobless claims, existing home sales and Philadelphia Fed survey. Versus the Japanese yen, the greenback rebounded strongly in Asia session after Wednesday’s selloff to 97.76 on short-covering together the rally in Japan’s Nikkei index and then rallied to 99.00 in European morning on active broad-based selling of yen. Later, price rose further in New York morning on the better-than-expected U.S. jobless claims (309K versus 330K) and climbed to 99.65 after the release of the upbeat U.S. existing home sales, leading index and Philadelphia Fed survey but then retreated on profit-taking. U.S. existing home sales came in at 5.48M and 1.7% m/m, versus the forecast of 5.25M and -2.6% m/m respectively. U.S. leading indicator was 0.7%, versus the expectation of 0.6%, previous reading is revised to 0.5%. U.S. Philadelphia Fed survey (Sep) came in at 22.3, versus the forecast of 10.3. The single currency edged lower in Asia after a brief pullback from Wednesday’s top at 1.3543 to 1.3501 in Australia, and climbed to a fresh 7-month top at 1.3569 in Europe on active cross buying of euro versus sterling. The price then retreated to 1.3509 in theNew York session on renewed dollar’s broad-based rebound and profit-taking in the EUR/JPY cross. The British pound traded narrowly in Asia after Wednesday’s rally to a 8-month top at 1.6163 but fell sharply to 1.6063 in European morning after the release of much weaker-than-expected U.K. retail sales (-0.9% m/m and 2.1% y/y, versus the forecast of 0.4% m/m and 3.3% y/y), price later ratcheted lower to 1.6022 in New York session before stabilising. In other news, BoE’s Miles said that U.K. growth may be becoming self-sustaining, but recovery still embryonic. And, it is too early to judge market reaction to Fed, as the U.K. yield curve is not tied to the U.S. He also stressed that stronger growth is the main reason for his dropping call for more QE, and markets may be proved right on faster jobless fall, but perhaps underestimate productivity rebound. ECB’s Asmussen stated that the Greek programme is working, and we are seeing progress. He noted that Greek growth data released today is “positive and encouraging”.
Data to be released on Friday: U.K. PSNCR, public sector net borrowing, EU consumer confidence, Canada CPI on Friday. China will be closed due to public holiday.