Market Review - 22/04/2014 22:31GMT
Dollar trades flat against other major currencies in quiet trading
The greenback was little changed against other major currencies in quiet trading on Tuesday after data showed that U.S. existing home sales fell less than expected in March, while manufacturing activity in the Richmond region rose this month.
During the day, although the single currency traded sideways in Asia and then briefly fell below Monday's low at 1.3787 to 1.3785 in European morning, lack of follow through selling prompted short covering and price was lifted to 1.3825 in New York morning. However, sentiment on the single currency remained fragile after the dovish comments from ECB's policymakers said earlier in the day that the central bank is ready to act to keep inflation from falling. Euro later dropped to 1.3795 and then orbited around 1.3800 for rest of the New York session.
ECB's Coeure said 'we still have further margin to reduce the main 0.25% interest rate; bank considering whether euro level is a risk that could slow return to 2% inflation target; changes could bring deposit rate into negative territory, QE remains possible.' ECB's Linde said 'ECB ready to act if inflation in Apr and May show that the danger of inflation being too loo for too long is there; any QE programme is not easy to implement.'
Against the Japanese yen, although dollar extended its recent ascent and rose above Monday's high of 102.71 to a fresh near 2-week peak at 102.73 at Tokyo open, risk aversion due to the decline in Nikkei triggered broad-based buying in yen and the pair fell to 102.41 in European morning before recovering. Dollar rebounded to 102.66 in New York morning after release of better-than-expected U.S. existing home sales reports and then moved sideways in quiet New York afternoon.
U.S. existing home sales fell by 0.2% in March, to an annual rate of 4.59 million. It was the weakest rate since July 2012, but came in ahead of expectations for 4.55 million.
The British pound found support at 1.6785 against the dollar in Asia on Tuesday and jumped at European open as European traders seemed to react positively to the mega-M&A news of Pfizer's potential offer to buy U.K. AstraZeneca. Later, cable rose to 1.6839 but selling below last Thursday 4-1/2 year peak at 1.6842 knocked price down in New York morning, price fell to 1.6813 in tandem with euro before staging another rebound to 1.6836.
In other news, China Central Bank said 'to cut reserve requirement ratio for some rural banks between 0.5% n 2% points; RRR cut for rural banks to be effective from April 25; to continue implement prudent monetary policy; RRR cut will not affect overall banking liquidity; to keep liquidity conditions appropriate, keep credit growth at reasonable pace.'
Data to be released on Tuesday:
Australia CPI, China HSBC manufacturing PMI, France manufacturing and service PMI, Germany manufacturing and service PMI, euro zone manufacturing and service PMI, BoE minutes, MPC vote outcome, U.K. PSNCR, public sector net borrowing, CBI trends, Canada retail sales, U.S. manufacturing PMI and new home sales.
Dollar trades flat against other major currencies in quiet trading
The greenback was little changed against other major currencies in quiet trading on Tuesday after data showed that U.S. existing home sales fell less than expected in March, while manufacturing activity in the Richmond region rose this month.
During the day, although the single currency traded sideways in Asia and then briefly fell below Monday's low at 1.3787 to 1.3785 in European morning, lack of follow through selling prompted short covering and price was lifted to 1.3825 in New York morning. However, sentiment on the single currency remained fragile after the dovish comments from ECB's policymakers said earlier in the day that the central bank is ready to act to keep inflation from falling. Euro later dropped to 1.3795 and then orbited around 1.3800 for rest of the New York session.
ECB's Coeure said 'we still have further margin to reduce the main 0.25% interest rate; bank considering whether euro level is a risk that could slow return to 2% inflation target; changes could bring deposit rate into negative territory, QE remains possible.' ECB's Linde said 'ECB ready to act if inflation in Apr and May show that the danger of inflation being too loo for too long is there; any QE programme is not easy to implement.'
Against the Japanese yen, although dollar extended its recent ascent and rose above Monday's high of 102.71 to a fresh near 2-week peak at 102.73 at Tokyo open, risk aversion due to the decline in Nikkei triggered broad-based buying in yen and the pair fell to 102.41 in European morning before recovering. Dollar rebounded to 102.66 in New York morning after release of better-than-expected U.S. existing home sales reports and then moved sideways in quiet New York afternoon.
U.S. existing home sales fell by 0.2% in March, to an annual rate of 4.59 million. It was the weakest rate since July 2012, but came in ahead of expectations for 4.55 million.
The British pound found support at 1.6785 against the dollar in Asia on Tuesday and jumped at European open as European traders seemed to react positively to the mega-M&A news of Pfizer's potential offer to buy U.K. AstraZeneca. Later, cable rose to 1.6839 but selling below last Thursday 4-1/2 year peak at 1.6842 knocked price down in New York morning, price fell to 1.6813 in tandem with euro before staging another rebound to 1.6836.
In other news, China Central Bank said 'to cut reserve requirement ratio for some rural banks between 0.5% n 2% points; RRR cut for rural banks to be effective from April 25; to continue implement prudent monetary policy; RRR cut will not affect overall banking liquidity; to keep liquidity conditions appropriate, keep credit growth at reasonable pace.'
Data to be released on Tuesday:
Australia CPI, China HSBC manufacturing PMI, France manufacturing and service PMI, Germany manufacturing and service PMI, euro zone manufacturing and service PMI, BoE minutes, MPC vote outcome, U.K. PSNCR, public sector net borrowing, CBI trends, Canada retail sales, U.S. manufacturing PMI and new home sales.
Recommended Content
Editors’ Picks
AUD/USD hovers around 0.6500 amid light trading, ahead of US GDP
AUD/USD is trading close to 0.6500 in Asian trading on Thursday, lacking a clear directional impetus amid an Anzac Day holiday in Australia. Meanwhile, traders stay cautious due ti risk-aversion and ahead of the key US Q1 GDP release.
USD/JPY finds its highest bids since 1990, near 155.50
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, testing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming Japanese intervention risks. Focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Meta Platforms Earnings: META sinks 10% on lower Q2 revenue guidance Premium
This must be "opposites" week. While Doppelganger Tesla rode horrible misses on Tuesday to a double-digit rally, Meta Platforms produced impressive beats above Wall Street consensus after the close on Wednesday, only to watch the share price collapse by nearly 10%.