Market Review - 11/09/2014 22:33GMT
Dollar rises to a fresh 6-year high verus yen after dovish comments from BOJ governor Kuroda
The greenback jumped to a fresh 6-year high at 107.20 in New York on Thursday after dovish comments from BOJ's governor Kuroda, however, active profit-taking knocked price lower to 106.69 before rebounding.
Bank of Japan's Kuroda said cannot comment on specific FX levels; FX market seems to be focusing on direction of monetary policies of U.S., Japan, Europe; don't see current yen weakness as extremely negative for Japan's economy; U.S. economy is recovering steadily, allowing Fed to taper asset purchases while Bank of Japan is maintaining its massive stimulus; Japan Q2 economy contracted due to tax hike impact but what's important is Q3 rebound, how economy performs thereafter; it's true we saw some weak economic data but expect Jul-Sep GDP to turn positive; not true Bank of Japan has no options available if it were to ease further; we will adjust policy, ready to easy policy further if we feel we are not making steadily progress toward meeting price target; for now, I don't think there is any need for additional policy steps.
The single currency fell briefly to an intra-day low at 1.2897 at European open on Thursday due to cross-selling of euro versus sterling (eur/gbp dropped to 0.7942), however, buying interest on short-covering lifted price to 1.2952 in New York morning before easing.
European Central Bank President Mario Draghi urged governments to match the ECB's effort with investment and structural reforms to help the flagging euro zone grow. Draghi said it may also be useful to have a discussion about the overall fiscal stance of the euro zone with a view to raising public investment where possible.
In other news, EU's Van Rompuy said new Russia sanctions will take effect Friday; EU may suspend or amend sanctions based on review of peace moves to be carried out by end-Sep; EU could repeal Russia sanctions in all or in part if situation on ground warrants.
The British pound found renewed buying interest at 1.6186 in Asia and then ratcheted higher to 1.6270 in New York morning before retreating briefly to 1.6214.
Bank of England's Kohn said exit from unconventional monetary policy likely to be positive for UK economy and markets; exit not without dangers, due to possible mispricing of credit, interest rate and liquidity risks; banks should not expect Bank of England to require them hold more capital at every stage of business cycle than before crisis.
Friday will see the relesae of New Zealand's manufacturing PMI, Japan's capacity utility index and industrial output, eurozone employment and industrial production, U.S. exports, imports, retail sales, University of Michigan sentiment and business inventories.
Dollar rises to a fresh 6-year high verus yen after dovish comments from BOJ governor Kuroda
The greenback jumped to a fresh 6-year high at 107.20 in New York on Thursday after dovish comments from BOJ's governor Kuroda, however, active profit-taking knocked price lower to 106.69 before rebounding.
Bank of Japan's Kuroda said cannot comment on specific FX levels; FX market seems to be focusing on direction of monetary policies of U.S., Japan, Europe; don't see current yen weakness as extremely negative for Japan's economy; U.S. economy is recovering steadily, allowing Fed to taper asset purchases while Bank of Japan is maintaining its massive stimulus; Japan Q2 economy contracted due to tax hike impact but what's important is Q3 rebound, how economy performs thereafter; it's true we saw some weak economic data but expect Jul-Sep GDP to turn positive; not true Bank of Japan has no options available if it were to ease further; we will adjust policy, ready to easy policy further if we feel we are not making steadily progress toward meeting price target; for now, I don't think there is any need for additional policy steps.
The single currency fell briefly to an intra-day low at 1.2897 at European open on Thursday due to cross-selling of euro versus sterling (eur/gbp dropped to 0.7942), however, buying interest on short-covering lifted price to 1.2952 in New York morning before easing.
European Central Bank President Mario Draghi urged governments to match the ECB's effort with investment and structural reforms to help the flagging euro zone grow. Draghi said it may also be useful to have a discussion about the overall fiscal stance of the euro zone with a view to raising public investment where possible.
In other news, EU's Van Rompuy said new Russia sanctions will take effect Friday; EU may suspend or amend sanctions based on review of peace moves to be carried out by end-Sep; EU could repeal Russia sanctions in all or in part if situation on ground warrants.
The British pound found renewed buying interest at 1.6186 in Asia and then ratcheted higher to 1.6270 in New York morning before retreating briefly to 1.6214.
Bank of England's Kohn said exit from unconventional monetary policy likely to be positive for UK economy and markets; exit not without dangers, due to possible mispricing of credit, interest rate and liquidity risks; banks should not expect Bank of England to require them hold more capital at every stage of business cycle than before crisis.
Friday will see the relesae of New Zealand's manufacturing PMI, Japan's capacity utility index and industrial output, eurozone employment and industrial production, U.S. exports, imports, retail sales, University of Michigan sentiment and business inventories.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.