Market Review - 14/08/2014 18:59GMT
U.S. dollar falls on increased jobless claims before rising again
The single currency came under renewed selling at 1.3368 just ahead of European open on Thursday after the release of French Q2 GDP, which came in at 0.0% versus forecast of 0.1% growth, that showed its economy stagnated. In addition, the downbeat comments from French FinMin Spain gave euro bears further excuse to sell the euro. The pair dropped to intra-day low of 1.3348 and then rebounded on short-covering after German GDP showed a 'contraction' in eurozone largest economy, Q2 GDP came in at -0.2% m/m or 0.8% y/y versus forecast of 0.0% m/m and 1.5% y/y.
Euro later jumped to 1.3408 due to dollar's weakness after the release of more than expected U.S. jobless claims data, however, renewed selling interest there capped euro's upside and price ratcheted lower again to 1.3361 in New York. Eurozone economy also stagnated in the 2nd quarter whilst Jul m/m core inflation fell 0.7% versus previous reading of 0.1%.
U.S. dollar rose briefly to 102.66 in Asian morning on Thursday and then retreated to 102.32 in New York morning after the release of more than expected U.S. jobless claims which came in at 311,000 versus economists' forecast of 295,000. However, renewed buying interest there lifted price again to 102.54 in New York.
The British pound remained under pressure on Thursday following Wed's release of BoE quarterly inflation report and its dovish statement. Cable dropped to a fresh 4-month low at 1.6657 in early European morning and then rebounded to 1.6697 in New York morning on short-covering. Earlier, Bank of England MPC member David Miles said on BBC radio that 'bank won't be pushed into raising interest rates sharply because inflation outlook is subdued; investment spending picked up strongly, expects that to continue; likely going into next year that wages will pick up, start to outstrip inflation; the path back to more normal interest rates likely to be gradual.' BoE's Miles added 'gap between BoE interest rate and mortgage rates likely to be higher than in the past, a legacy of financial crisis; some forward looking indicators of UK housing market looking a bit cooler.'
In other news, U.S. president Obama said U.S. continues to make progress with missions inside Iraq; situation on mount Sinjar has greatly improved, does not expect there to be additional mission to evacuate people from mountain; U.S. will continue airstrikes to protect U.S. facilities in Iraq, calls on Iraqis to unite to defeat Islamic state forces.
Friday will see the release of U.K. GDP, Canada's manufacturing sales, U.S. PPI, NY Fed manufacturing, overall net capital flows, foreign treasury buy, industrial and manufacturing output, capacity utilization and University of Michigan sentiment.
U.S. dollar falls on increased jobless claims before rising again
The single currency came under renewed selling at 1.3368 just ahead of European open on Thursday after the release of French Q2 GDP, which came in at 0.0% versus forecast of 0.1% growth, that showed its economy stagnated. In addition, the downbeat comments from French FinMin Spain gave euro bears further excuse to sell the euro. The pair dropped to intra-day low of 1.3348 and then rebounded on short-covering after German GDP showed a 'contraction' in eurozone largest economy, Q2 GDP came in at -0.2% m/m or 0.8% y/y versus forecast of 0.0% m/m and 1.5% y/y.
Euro later jumped to 1.3408 due to dollar's weakness after the release of more than expected U.S. jobless claims data, however, renewed selling interest there capped euro's upside and price ratcheted lower again to 1.3361 in New York. Eurozone economy also stagnated in the 2nd quarter whilst Jul m/m core inflation fell 0.7% versus previous reading of 0.1%.
U.S. dollar rose briefly to 102.66 in Asian morning on Thursday and then retreated to 102.32 in New York morning after the release of more than expected U.S. jobless claims which came in at 311,000 versus economists' forecast of 295,000. However, renewed buying interest there lifted price again to 102.54 in New York.
The British pound remained under pressure on Thursday following Wed's release of BoE quarterly inflation report and its dovish statement. Cable dropped to a fresh 4-month low at 1.6657 in early European morning and then rebounded to 1.6697 in New York morning on short-covering. Earlier, Bank of England MPC member David Miles said on BBC radio that 'bank won't be pushed into raising interest rates sharply because inflation outlook is subdued; investment spending picked up strongly, expects that to continue; likely going into next year that wages will pick up, start to outstrip inflation; the path back to more normal interest rates likely to be gradual.' BoE's Miles added 'gap between BoE interest rate and mortgage rates likely to be higher than in the past, a legacy of financial crisis; some forward looking indicators of UK housing market looking a bit cooler.'
In other news, U.S. president Obama said U.S. continues to make progress with missions inside Iraq; situation on mount Sinjar has greatly improved, does not expect there to be additional mission to evacuate people from mountain; U.S. will continue airstrikes to protect U.S. facilities in Iraq, calls on Iraqis to unite to defeat Islamic state forces.
Friday will see the release of U.K. GDP, Canada's manufacturing sales, U.S. PPI, NY Fed manufacturing, overall net capital flows, foreign treasury buy, industrial and manufacturing output, capacity utilization and University of Michigan sentiment.
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