Market Review - 26/01/2015 19:00GMT
Euro rebounds from fresh 11-year low versus dollar on short-covering
Euro recovered from a fresh 11-year trough against the dollar on Monday as investors ignored the concerns over the Greek's future in euro zone after general Greek's government election results over the last weekend and decided to lock in their profits in euro's recent decline.
During the day, although the single currency weakened ahead of Asian open on Monday and tumbled to a fresh 11-year low at 1.1098 after Greece's anti-austerity Syriza party won a general Greek election, active short-covering emerged and lifted price from there. Later, release of encouraging Ifo reports the gave the pair another boost in Europe and price rose to 1.1295 in New York before easing.
IFO economic research institute showed on Monday that German business confidence improved to the highest level in six months in January. In a report, Ifo said its Business Climate Index rose to a seasonally adjusted 106.7 this month, above forecasts for 106.2 and up from a reading of 105.5 in December. Meanwhile, the Current Assessment Index increased to 111.7 in January, beating expectations for a reading of 110.6 and up from 110.0 in December. However, the Business Expectations Index (which measures attitudes toward business prospects over the next six months) improved to 102.0 this month from 101.1 in December, missing forecasts for 102.5.
Versus the Japanese yen, although active cross-buying in yen pressured dollar to 117.27 ahead of Asian open, unwinding in yen crosses versus other major currencies lifted price from there and the pair later ratcheted higher to 118.48 in New York morning before moving sideways.
Cable tracked euro's intra-day move closely on Monday and recovered after a brief retreat to 1.4972 ahead of Asian open. Later, price rebounded to 1.5045 in Europe and then higher to 1.5100 in New York.
In other news, German government spokesman said 'Berlin will offer its cooperation to the next Greek government; it is important that new Greek government takes measures to ensure progress in economic recovery; new Greek government should stick to agreed commitments; basis of cooperation remains EU solidarity with Greece combined with Greece's own efforts.'
Eurogroup's chairman Jeroen Dijsselbloem said on Monday, 'open for discussions on new Greek gov't; will come back to Greek debt sustainability after completion of fifth review; there is very little support for Greek debt relief.' Later, he said 'euro ministers are ready to work with new Greek government; very motivated to work with Greece to keep economic recovery, key not to lose progress achieved; Syriza has ambition of Greece staying in euro zone and that is the basis on which we will work; assumes Syriza will abide by the rules; Greek problems have not changed overnight with Syriza victory, there is still work to be done.'
Tuesday will see the release of Australia's NAB Business Conditions, NAB Business Confidence, China's CB leading economic index, France's Business Climate, EU Finance Ministers meeting, U.K.'s GDP, BBA Mortgage Approvals, U.S.'s Durable goods orders, Redbook, Markit Service PMI, New Home Sales, Consumer Confidence
Euro rebounds from fresh 11-year low versus dollar on short-covering
Euro recovered from a fresh 11-year trough against the dollar on Monday as investors ignored the concerns over the Greek's future in euro zone after general Greek's government election results over the last weekend and decided to lock in their profits in euro's recent decline.
During the day, although the single currency weakened ahead of Asian open on Monday and tumbled to a fresh 11-year low at 1.1098 after Greece's anti-austerity Syriza party won a general Greek election, active short-covering emerged and lifted price from there. Later, release of encouraging Ifo reports the gave the pair another boost in Europe and price rose to 1.1295 in New York before easing.
IFO economic research institute showed on Monday that German business confidence improved to the highest level in six months in January. In a report, Ifo said its Business Climate Index rose to a seasonally adjusted 106.7 this month, above forecasts for 106.2 and up from a reading of 105.5 in December. Meanwhile, the Current Assessment Index increased to 111.7 in January, beating expectations for a reading of 110.6 and up from 110.0 in December. However, the Business Expectations Index (which measures attitudes toward business prospects over the next six months) improved to 102.0 this month from 101.1 in December, missing forecasts for 102.5.
Versus the Japanese yen, although active cross-buying in yen pressured dollar to 117.27 ahead of Asian open, unwinding in yen crosses versus other major currencies lifted price from there and the pair later ratcheted higher to 118.48 in New York morning before moving sideways.
Cable tracked euro's intra-day move closely on Monday and recovered after a brief retreat to 1.4972 ahead of Asian open. Later, price rebounded to 1.5045 in Europe and then higher to 1.5100 in New York.
In other news, German government spokesman said 'Berlin will offer its cooperation to the next Greek government; it is important that new Greek government takes measures to ensure progress in economic recovery; new Greek government should stick to agreed commitments; basis of cooperation remains EU solidarity with Greece combined with Greece's own efforts.'
Eurogroup's chairman Jeroen Dijsselbloem said on Monday, 'open for discussions on new Greek gov't; will come back to Greek debt sustainability after completion of fifth review; there is very little support for Greek debt relief.' Later, he said 'euro ministers are ready to work with new Greek government; very motivated to work with Greece to keep economic recovery, key not to lose progress achieved; Syriza has ambition of Greece staying in euro zone and that is the basis on which we will work; assumes Syriza will abide by the rules; Greek problems have not changed overnight with Syriza victory, there is still work to be done.'
Tuesday will see the release of Australia's NAB Business Conditions, NAB Business Confidence, China's CB leading economic index, France's Business Climate, EU Finance Ministers meeting, U.K.'s GDP, BBA Mortgage Approvals, U.S.'s Durable goods orders, Redbook, Markit Service PMI, New Home Sales, Consumer Confidence
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