Market Review - 23/07/2014 22:49GMT
Euro weakens to a fresh 8-month low of 1.3455 on concerns over Russian sanctions
The single currency hit a fresh 8-month low of 1.3455 against the dollar on Wednesday on concerns over more and tougher sanctions on the EU’s third-biggest trading partner, Russia. German government yields fell close to record lows on worries over their potential impact on fragile euro zone growth.
Trading was relatively thin on Wednesday as investors are reluctant to add bets on geopolitical concerns between Russia and the Ukraine. Euro fell to 1.3455 and then bounced briefly to 1.3474 before trading sideways. Market players expect further escalation of tensions may weigh further on the euro if more trade sanctions are enforced on Russia together with ECB’s keeping the door open to a large-scale asset purchase programme.
The British pound rebounded briefly to 1.7095 in Europe just before the release of BOE minutes and then tumbled after the Bank of England minutes failed to boost expectations of an interest rate hike by year-end. Cable fell to an intra-day low of 1.7024 in New York morning before recovering briefly to 1.7051. Euro hit a near two-year low against the British pound of 78.69 pence in Europe before recovering to 79.10 pence after the release of less hawkish BOE minutes.
The greenback fell briefly below Tuesday's low at 101.33 to 101.32 in Europe on Wednesday and then rebounded to 101.55 in late New York. The Australian dollar rose strongly to 0.9455 after the release of higher-than-expected Australia’s CPI on June, dampening the expectations of future rate cuts.
In other news, IMF cut U.S. 2014 growth forecast to 1.7% from Jun forecast of 2% due to 1st quarter growth revision and said 'economic activity to accelerate for rest of the year, kept 2015 forecast at 3%; risks to outlook include slower growth in emerging markets, oil price spikes tied to Ukraine or Iraq, earlier than expected U.S. interest rate hike; U.S. output gap is close to 4% at end-2013, could take until 2018 to close; Fed can keep policy rates at 0 for longer than mid-2015 if inflation stays subdued, sees gradual rate normalization.'
Thursday will see NZ RBNZ rate decision, trade balance, imports, exports, Japan exports, imports, manufacturing PMI, China HSBC manufacturing PMI, France manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, Italy retail sales, UK retail sales, U.S. jobless claims, manufacturing PMI and new home sales.
Euro weakens to a fresh 8-month low of 1.3455 on concerns over Russian sanctions
The single currency hit a fresh 8-month low of 1.3455 against the dollar on Wednesday on concerns over more and tougher sanctions on the EU’s third-biggest trading partner, Russia. German government yields fell close to record lows on worries over their potential impact on fragile euro zone growth.
Trading was relatively thin on Wednesday as investors are reluctant to add bets on geopolitical concerns between Russia and the Ukraine. Euro fell to 1.3455 and then bounced briefly to 1.3474 before trading sideways. Market players expect further escalation of tensions may weigh further on the euro if more trade sanctions are enforced on Russia together with ECB’s keeping the door open to a large-scale asset purchase programme.
The British pound rebounded briefly to 1.7095 in Europe just before the release of BOE minutes and then tumbled after the Bank of England minutes failed to boost expectations of an interest rate hike by year-end. Cable fell to an intra-day low of 1.7024 in New York morning before recovering briefly to 1.7051. Euro hit a near two-year low against the British pound of 78.69 pence in Europe before recovering to 79.10 pence after the release of less hawkish BOE minutes.
The greenback fell briefly below Tuesday's low at 101.33 to 101.32 in Europe on Wednesday and then rebounded to 101.55 in late New York. The Australian dollar rose strongly to 0.9455 after the release of higher-than-expected Australia’s CPI on June, dampening the expectations of future rate cuts.
In other news, IMF cut U.S. 2014 growth forecast to 1.7% from Jun forecast of 2% due to 1st quarter growth revision and said 'economic activity to accelerate for rest of the year, kept 2015 forecast at 3%; risks to outlook include slower growth in emerging markets, oil price spikes tied to Ukraine or Iraq, earlier than expected U.S. interest rate hike; U.S. output gap is close to 4% at end-2013, could take until 2018 to close; Fed can keep policy rates at 0 for longer than mid-2015 if inflation stays subdued, sees gradual rate normalization.'
Thursday will see NZ RBNZ rate decision, trade balance, imports, exports, Japan exports, imports, manufacturing PMI, China HSBC manufacturing PMI, France manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, Italy retail sales, UK retail sales, U.S. jobless claims, manufacturing PMI and new home sales.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.