Dollar rises on upbeat consumer confidence data: Oct 20, 2014

Market Review - 17/10/2014 18:36GMT

Dollar rises on upbeat consumer confidence data

The greenback rose against majority of its major peers on Friday as data showed a gauge of U.S. consumer confidence rose to its highest level since July 2007.

U.S. U. of Michigan consumer sentiment prelim. comes in better-than-expected at 86.4 (highest lvl since Jul 2007) vs forecast of 84.1.

Versus the Japanese yen, although the greenback edged fell to 106.14 in Asian morning due to the selloff in Nikkei-225 index, price pared its losses and gained to 106.62 in European morning on broad-based selling of yen, triggered by the rally in Nikkei futures. Later, dollar found renewed buying at 106.35 at New York open and rose to 106.78 in New York morning before stabilizing, price later climbed to session high of 106.95 near New York close.

The single currency remained under pressure in Asia and weakened to 1.2781 at European open before rising to an intra-day high at 1.2837 in European morning due to cross-buying of euro vs yen. However, price met renewed selling at New York open and dropped sharply to an intra-day low at 1.2744 in New York morning on dollar's broad-based strength before recovering to 1.2779 in New York afternoon.

The British pound met selling interest at 1.6110 ahead of Asian open and retreated to session low at 1.6030 in European morning, however, price pared its losses and rose to intra-day high at 1.6126 ahead of New York open on cross-buying of sterling vs euro. Later, cable fell in tandem with euro to 1.6060 in New York morning before staging a recovery.

In other news, Fed's Rosengren says 'too soon to say if recent mkt volatility will change Fed's path; will on reconsider changes to bond buying if forecast for U.S. economy changes; Europe faces significant problems n is a concern for the Fed; mid 2015 rate hike still likely; strg dlr, falling oil prices likely to weaken inflation outlook; likely several years b4 U.S. reaches Fed's 2% inflation target; does not expect Fed will have to resume QE, but does not rule it out if economy weakens.'

On the data front, U.S. housing starts change came in at 6.3%, up fm prev. revised reading of -12.8%. Building permits change came in at 1.5%, up fm -5.1% previously.

Data to be released this week:

UK Rightmove house prices, Germany producer prices, EU current account, Italy industrial orders, industrial sales and Canada wholesale trade on Monday.

Australia CB leading indicator, Westpac leading index, RBA minutes, China GDP, retail sales, industrial output, Japan industry index, Swiss trade balance, UK PSNB, PSNCR, U.S. Redbook retail sales and existing home sales on Tuesday.

Japan imports, exports, trade balance, Australia inflation, BoE minutes, UK BoE MPC vote, Canada retail sales, BoC rate decision, U.S. weekly earnings and CPI on Wednesday.

New Zealand CPI, Japan manufacturing PMI, China HSBC manufacturing PMI, France business climate, manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, EU manufacturing PMI, services PMI, Italy trade balance, UK retail sales, CBI trends, U.S. home price index, jobless claims, manufacturing PMI, leading index and consumer confidence on Thursday.  

New Zealand trade balance, imports,exports, China house prices, Germany consumer sentiment, Italy retail sales, UKGDP and U.S. new home sales on Friday.