Market Review - 21/08/2015 17:00 All times in GMT
Euro rallies to a fresh near 2-month peak amid uncertainties in Fed rate hike
The single currency surged to a near 2-month peak against the U.S. dollar on Friday as dovish minutes from the Federal Open Market Committee's July meeting earlier this week suggested a potential delayed interest rate hike and triggered massive selling in the greenback.
During the day, euro started to ratchet higher after finding support at 1.1227 ahead of the Asian open and then rose to 1.1295 before retreating to 1.1241 in European morning due to selling in eur/jpy cross. Later, the single regained support versus the U.S. dollar and then climbed to a fresh near 2-month peak at 1.1377 in New York trading before easing.
For usd/jpy pair, broad-based buying of yen for risk aversion on global stock decline together with weakness in the greenback's versus other major currencies kept the pair under pressure on Friday. Price fell from Asian high of 123.50 to 122.81 ahead of European open and then further lower to 121.82 in New York trading before stabilizing due partly to position adjustment ahead of the weekend.
The British pound was little change against the U.S. dollar in New York trading. During the day, cable rebounded from 1.5681 in Asia and then rose in tandem with euro to a fresh 7-week high of 1.5724 in Europe, however, cross-selling in sterling versus the single currency and Japanese yen checked intra-day gain there and the pair later fell to fresh session low of 1.5658 in New York morning n then moved sideways.
On the data front, the financial data firm Markit released a slew of PMI reports on Friday. Markit said 'French Services PMI fell to a seasonally adjusted 51.8, from 52.0 in the preceding month; French manufacturing PMI fell to a seasonally adjusted 48.6, from 49.6 in the preceding month; German manufacturing PMI rose to a seasonally adjusted 53.2, from 51.8 in the preceding month; German Services PMI fell to 53.6, from 53.8 in the preceding month; Euro Zone Services PMI rose to 54.3, from 54.0 in the preceding quarter; euro zone's manufacturing PMI remained unchanged at 52.4, from 52.4 in the preceding month; and finally, Markit said its preliminary U.S. Manufacturing PMI fell to 52.9 in August, its lowest since October 2013, from a final July reading of 53.8.'
In other news, Japan's economy minister Akira Amari said on Friday 'expect Chinese government to take steps to prevent its economic slowdown from becoming a global problem ; government will hold dialogue with private sector from autumn to discuss how to boost capex; government continues to strongly request that companies use record earnings to raise wages.' Meanwhile, Japan's finance minister Taro Aso said a little later in Asia, 'important that China continues to shift its FX system towards a market based one; Japan would face tough decision on how to respond if China intervenes in markets frequently; China's slowdown undoubtedly has big impact on japan stock moves; must watch various data on China's economy to see if it indeed is expanding at pace of 7%.'
Data to be released this week:
Japan leading indicators, and Germany import price on Monday. In addition, Federal Reserve Bank of Atlanta President Dennis Lockhart will speak on "Pensions and Economy" before the 2015 Public Pension Funding Forum co-hosted by the National Conference On Public Employee Retirement System.
Germany GDP, Ifo reports, UK BBA mortgage approvals, U.S. existing home sales, consumer confidence, new home sales and Redbook on Tuesday.
New Zealand trade balance, Australia CB leading indicator, UK nationwide house prices, CBI distributive trades, and U.S. durable goods orders on Wednesday.
Australia building capex, capital expenditure, France business climate, Switzerland industrial orders, and U.S. pending home sales on Thursday.
UK Gfk consumer confidence, Japan all household spending, CPI, retail sales, Switzerland GDP, France producer prices, Italy business confidence, consumer confidence, U.K. GDP (second release), Italy wage inflation, euro zone business climate, consumer inflation expectation, economic sentiment, industrial sentiment, Germany CPI, HICP, Canada producer prices, and U.S. consumption, PCE, personal income, personal consumption, on Friday.
Euro rallies to a fresh near 2-month peak amid uncertainties in Fed rate hike
The single currency surged to a near 2-month peak against the U.S. dollar on Friday as dovish minutes from the Federal Open Market Committee's July meeting earlier this week suggested a potential delayed interest rate hike and triggered massive selling in the greenback.
During the day, euro started to ratchet higher after finding support at 1.1227 ahead of the Asian open and then rose to 1.1295 before retreating to 1.1241 in European morning due to selling in eur/jpy cross. Later, the single regained support versus the U.S. dollar and then climbed to a fresh near 2-month peak at 1.1377 in New York trading before easing.
For usd/jpy pair, broad-based buying of yen for risk aversion on global stock decline together with weakness in the greenback's versus other major currencies kept the pair under pressure on Friday. Price fell from Asian high of 123.50 to 122.81 ahead of European open and then further lower to 121.82 in New York trading before stabilizing due partly to position adjustment ahead of the weekend.
The British pound was little change against the U.S. dollar in New York trading. During the day, cable rebounded from 1.5681 in Asia and then rose in tandem with euro to a fresh 7-week high of 1.5724 in Europe, however, cross-selling in sterling versus the single currency and Japanese yen checked intra-day gain there and the pair later fell to fresh session low of 1.5658 in New York morning n then moved sideways.
On the data front, the financial data firm Markit released a slew of PMI reports on Friday. Markit said 'French Services PMI fell to a seasonally adjusted 51.8, from 52.0 in the preceding month; French manufacturing PMI fell to a seasonally adjusted 48.6, from 49.6 in the preceding month; German manufacturing PMI rose to a seasonally adjusted 53.2, from 51.8 in the preceding month; German Services PMI fell to 53.6, from 53.8 in the preceding month; Euro Zone Services PMI rose to 54.3, from 54.0 in the preceding quarter; euro zone's manufacturing PMI remained unchanged at 52.4, from 52.4 in the preceding month; and finally, Markit said its preliminary U.S. Manufacturing PMI fell to 52.9 in August, its lowest since October 2013, from a final July reading of 53.8.'
In other news, Japan's economy minister Akira Amari said on Friday 'expect Chinese government to take steps to prevent its economic slowdown from becoming a global problem ; government will hold dialogue with private sector from autumn to discuss how to boost capex; government continues to strongly request that companies use record earnings to raise wages.' Meanwhile, Japan's finance minister Taro Aso said a little later in Asia, 'important that China continues to shift its FX system towards a market based one; Japan would face tough decision on how to respond if China intervenes in markets frequently; China's slowdown undoubtedly has big impact on japan stock moves; must watch various data on China's economy to see if it indeed is expanding at pace of 7%.'
Data to be released this week:
Japan leading indicators, and Germany import price on Monday. In addition, Federal Reserve Bank of Atlanta President Dennis Lockhart will speak on "Pensions and Economy" before the 2015 Public Pension Funding Forum co-hosted by the National Conference On Public Employee Retirement System.
Germany GDP, Ifo reports, UK BBA mortgage approvals, U.S. existing home sales, consumer confidence, new home sales and Redbook on Tuesday.
New Zealand trade balance, Australia CB leading indicator, UK nationwide house prices, CBI distributive trades, and U.S. durable goods orders on Wednesday.
Australia building capex, capital expenditure, France business climate, Switzerland industrial orders, and U.S. pending home sales on Thursday.
UK Gfk consumer confidence, Japan all household spending, CPI, retail sales, Switzerland GDP, France producer prices, Italy business confidence, consumer confidence, U.K. GDP (second release), Italy wage inflation, euro zone business climate, consumer inflation expectation, economic sentiment, industrial sentiment, Germany CPI, HICP, Canada producer prices, and U.S. consumption, PCE, personal income, personal consumption, on Friday.
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