Market Review - 28/07/2015 GMT22:47
Dollar rebounds vs major perrs ahead of Wednesday's FOMC decision
Despite Monday's rally from 1.0969 to as high as 1.1129, euro ratcheted lower on Tuesday and fell to a low of 1.1022 due to cross selling especially versus sterling together with dollar's broad-based strength on the rally in U.S. stock markets ahead of Wednesday's FOMC rate decision. Euro later staged a brief bounce to 1.1064/65 in New York after the release of mixed U.S. economic data.
The U.S. Federal Reserve's Federal Open Market Committee on Tuesday started their 2-day meeting on interest rates and market players are waiting for the rate decision on Wednesday. U.S. Markit Services PMI came in at 55.2 in July versus previous reading of 54.8 whilst U.S. consumer confidence falls to its lowest level since September 2014 to 90.9.
The greenback fell briefly to 123.08 in Asian morning on Tuesday, however, active short-covering above Monday's 123.01 low lifted the pair and dollar later rallied to 123.80 in New York morning before retreating.
Cable came under renewed selling pressure after briefly bounce to 1.5580 ahead of European open and then tanked to 1.5528 when investors awaited the release of important UK GDP reports. However, renewed buying quickly emerged as U.K. GDP came in bang in line with street forecast, The data showed Britian's economy is still gathering pace and the BoE, like its Governor Carney said last week, will raise rate earlier than market expectation.
ONS showed 'UK prelim Q2 GDP +0.7 pct QQ vs Q1 +0.4 pct QQ; UK prelim Q2 GDP +2.6 pct YY vs Q1 +2.9 pct YY; UK Q2 services output +0.7 pct QQ, industrial output +1.0 pct QQ (Q1 +0.2 pct), construction 0.0 pct (Q1 -0.2 pct); UK May services sector output +0.3 pct MM vs April +0.2 pct MM; May +2.7 pct YY vs April +2.8 pct YY;
ONS said 'Q2 industrial output growth strongest since q4 2010, driven by biggest quarterly rise in resource extraction since Q3 1989; UK GDP per capita now "broadly level" with its pre-crisis peak of Q1 2008.'
BOE deputy governor Jon Cunliffe says banks must make "painful" adjustments" to business models; some new banking rules will need some "fine tuning"; banks not to expect a "turning back in the overall regulatory dial"; to tailor bank stress tests to the economic cycle, tougher in boom times.
Wednesday will see the release of Japan's retail sales, Germany's GfK consumer sentiment, Swiss UBS consumption indicator, U.K. mortgage approvals and CBI distributive trades, U.S. pending home sales change, FOMC rate decision and Fed's monetary policy statement.
Dollar rebounds vs major perrs ahead of Wednesday's FOMC decision
Despite Monday's rally from 1.0969 to as high as 1.1129, euro ratcheted lower on Tuesday and fell to a low of 1.1022 due to cross selling especially versus sterling together with dollar's broad-based strength on the rally in U.S. stock markets ahead of Wednesday's FOMC rate decision. Euro later staged a brief bounce to 1.1064/65 in New York after the release of mixed U.S. economic data.
The U.S. Federal Reserve's Federal Open Market Committee on Tuesday started their 2-day meeting on interest rates and market players are waiting for the rate decision on Wednesday. U.S. Markit Services PMI came in at 55.2 in July versus previous reading of 54.8 whilst U.S. consumer confidence falls to its lowest level since September 2014 to 90.9.
The greenback fell briefly to 123.08 in Asian morning on Tuesday, however, active short-covering above Monday's 123.01 low lifted the pair and dollar later rallied to 123.80 in New York morning before retreating.
Cable came under renewed selling pressure after briefly bounce to 1.5580 ahead of European open and then tanked to 1.5528 when investors awaited the release of important UK GDP reports. However, renewed buying quickly emerged as U.K. GDP came in bang in line with street forecast, The data showed Britian's economy is still gathering pace and the BoE, like its Governor Carney said last week, will raise rate earlier than market expectation.
ONS showed 'UK prelim Q2 GDP +0.7 pct QQ vs Q1 +0.4 pct QQ; UK prelim Q2 GDP +2.6 pct YY vs Q1 +2.9 pct YY; UK Q2 services output +0.7 pct QQ, industrial output +1.0 pct QQ (Q1 +0.2 pct), construction 0.0 pct (Q1 -0.2 pct); UK May services sector output +0.3 pct MM vs April +0.2 pct MM; May +2.7 pct YY vs April +2.8 pct YY;
ONS said 'Q2 industrial output growth strongest since q4 2010, driven by biggest quarterly rise in resource extraction since Q3 1989; UK GDP per capita now "broadly level" with its pre-crisis peak of Q1 2008.'
BOE deputy governor Jon Cunliffe says banks must make "painful" adjustments" to business models; some new banking rules will need some "fine tuning"; banks not to expect a "turning back in the overall regulatory dial"; to tailor bank stress tests to the economic cycle, tougher in boom times.
Wednesday will see the release of Japan's retail sales, Germany's GfK consumer sentiment, Swiss UBS consumption indicator, U.K. mortgage approvals and CBI distributive trades, U.S. pending home sales change, FOMC rate decision and Fed's monetary policy statement.
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