Dollar weakened against the yen on escalating tension between Ukraine and Russia: April 25, 2014

Market Review - 24/04/2014     22:40GMT  

Dollar weakened against the yen on escalating tension between Ukraine and Russia

The greenback dropped against the yen on Thursday after tensions between Russia and Ukraine flared anew and increased buying in safe-haven yen positions, offsetting upbeat durable goods orders numbers out of the U.S.  

Ukraine military forces killed five separatists earlier, while Russian President Vladimir Putin warned Kiev against stepping u pits offensive against the rebels.   

Russian President Vladimir Putin said 'if Kiev authorities have used the army in East Ukraine it is a very serious crime against its own people; there will be consequences if Kiev uses army against its people; sanctions harmful for everyone, destroy global economy n reflect badly on those using them.'  

Versus the Japanese yen, although dollar rebounded from Asian low at 102.25 and ratcheted higher to 102.65 in New York morning after release of upbeat U.S. durable goods orders data, broad based buying in yen on risk aversion due to rising geopolitical tensions knocked price sharply lower to 102.09 before recovering to 102.39. 

U.S. Commerce Department reported on Thursday that U.S. orders for durable goods rose 2.6% in March, better than expectations for a 2% gain. Core durable goods orders, which exclude volatile transportation items, rose 2% last month, beating forecasts for a 0.6% gain.  

In a separate report, the Labor Department said the number of individuals who filed for unemployment assistance in the U.S. in the week ending April 19 rose by 24,000 to 329,000. Market had expected the data to come at 315K.  

The single currency went through another roller coaster session. Price briefly rose to 1.3843 in European morning after better-than-expected German Ifo reports and then retreated to 1.3815 as ECB'sPresident Mario Draghi reiterated his stance that a strengthening euro could trigger further monetary easing. Later, Euro dropped sharply to 1.3792 in New York morning after robust U.S. durable goods orders data before rebounding to 1.3833 on renewed broad based weakness in greenback.  

ECB's President Mario Draghi said 'Governing Council committed unanimously to using unconventional n conventional instruments to deal effectively with risks of a too prolonged period of low inflation; worsening of medium-term inflation outlook would be context for more broad-based asset purchase programme; undue tightening of policy stance cud bead dressed with lowering of rate corridor, including negative deposit rate;impairments of policy transmission cud be addressed with targeted LTRO or ABS purchase programme; broad-based deflation risks are not what we see in the Euro zone today; ECB cannot make policy in favor of subsets of Euro zone countries; written account of ECB meetings would be useful, but shud not attribute positions of individual Council members.'  

Earlier in Europe, German research institute Ifo reported that its business climate index rose to a two-month high of 111.2 in April from 110.7 in previous month, ahead of expectations for 110.5.   

Cable also traded in a choppy fashion on Thursday. Price rebounded to 1.6806 in part due to cross-buying in sterling and then ratcheted lower to 1.6766 in New York morning. Price found support above Wednesday's low at 1.6762 and then rebounded to 1.6806 again on renewed broad-based weakness in greenback before easing.