Market Review - 01/10/2015 22:58GMT
Dollar retreats broadly on mixed U.S. data ahead of Friday's U.S. key jobs data
The greenback turned lower versus the other major currencies on Thursday, after data showed that U.S. jobless claims rose more than expected last week and the downbeat U.S. ISM manufacturing PMI data due later in the day.
Versus the Japanese yen, although U.S. dollar found support at 119.76 in Asia and then rose to 120.28 as rally in Nikkei index improved risk appetites, however, renewed cross-buying in yen later pressured price lower in European trading and the pair eventually fell to a fresh session low at 119.49 in New York morning after release of downbeat U.S. jobless claims and ISM manufacturing PMI before recovering.
The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending September 26 increased by 10,000 to 277,000 from the previous week's total of 267,000, compared to expectations for a 3,000 rise. In a separate report, The Institute for Supply Management (ISM) said on Thursday its index of factory activity in U.S. fell to 50.2, its lowest since May 2013 and just below the market's median forecast of 50.7.
On the other hand, financial data firm Markit said on Thursday its final U.S. Manufacturing Purchasing Managers' Index inched higher to 53.1 in September from 53.0 in August, which marked the lowest level since Oct. 2013. The September level was also up from a preliminary reading of 53.0. Meanwhile, the Commerce Department said on Thursday that U.S. construction spending climbed in August to the highest level since 2008 by increasing 0.7 percent to USD 1.09 trillion.
The single currency erased its early losses versus the greenback and rebounded to 1.1168 after an initial intra-day fall to 1.1135 in European morning. Later, euro/usd pair climbed higher in New York morning to a fresh session high of 1.1209 on broad-based weakness in the greenback before easing.
In European morning on Thursday, research group Markit said that Germany's manufacturing purchasing managers' index fell to 52.3 last month from 52.5 in August. France's manufacturing PMI ticked up to 50.6 in September from 50.4 the previous month. Markit also reported that its manufacturing PMI for the entire euro zone came out at 52.0 in September, in line with expectations.
Although the British pound fell in tandem with euro in European morning and gbp/usd pair tanked briefly to 1.5108, buying interest above Wednesday's fresh 4-1/2 month trough at 1.5107 contained intra-day losses there and the pair edged higher afterwards. Later, investors shrugged off the weaker-than-expected UK manufacturing PMI data and pushed price higher to 1.5158, then 1.5181 in New York morning before retreating.
Research group Markit showed that manufacturing activity in the U.K. expanded at the slowest rate in three months in September. Markit said its U.K. manufacturing purchasing managers' index eased to 51.5 in September from a revised reading of 51.6 in August. Economists had expected the index to tick up to 51.3.
In other news, ECB's supervisory chief Daniele Nouy said on Thursday, 'while indications of financial stress have generally declined in recent months, global financial conditions remain volatile in some respects; for banks, the economic climate in the euro area poses challenges to their profitability; banks will have to review their business; models in order to stay profitable; some of the banks within the euro area still face significant credit risk.'
Senior German government official said at New York midday, 'U.S. monetary policy is big challenge, expects discussion at IMF meeting on timing of U.S. rate rise; expects discussion on euro zone inflation at IMF meeting to be "relaxed", falling prices largely due to falling oil and weak raw materials.'
Data to be released on Friday:
Japan all household spending, unemployment rate, Australia retail sales, Markit construction PMI for UK, euro zone producer prices , U.S. non-farm payroll, unemployment rate, average earnings, durable goods (revised), and factory orders.
Dollar retreats broadly on mixed U.S. data ahead of Friday's U.S. key jobs data
The greenback turned lower versus the other major currencies on Thursday, after data showed that U.S. jobless claims rose more than expected last week and the downbeat U.S. ISM manufacturing PMI data due later in the day.
Versus the Japanese yen, although U.S. dollar found support at 119.76 in Asia and then rose to 120.28 as rally in Nikkei index improved risk appetites, however, renewed cross-buying in yen later pressured price lower in European trading and the pair eventually fell to a fresh session low at 119.49 in New York morning after release of downbeat U.S. jobless claims and ISM manufacturing PMI before recovering.
The U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits in the week ending September 26 increased by 10,000 to 277,000 from the previous week's total of 267,000, compared to expectations for a 3,000 rise. In a separate report, The Institute for Supply Management (ISM) said on Thursday its index of factory activity in U.S. fell to 50.2, its lowest since May 2013 and just below the market's median forecast of 50.7.
On the other hand, financial data firm Markit said on Thursday its final U.S. Manufacturing Purchasing Managers' Index inched higher to 53.1 in September from 53.0 in August, which marked the lowest level since Oct. 2013. The September level was also up from a preliminary reading of 53.0. Meanwhile, the Commerce Department said on Thursday that U.S. construction spending climbed in August to the highest level since 2008 by increasing 0.7 percent to USD 1.09 trillion.
The single currency erased its early losses versus the greenback and rebounded to 1.1168 after an initial intra-day fall to 1.1135 in European morning. Later, euro/usd pair climbed higher in New York morning to a fresh session high of 1.1209 on broad-based weakness in the greenback before easing.
In European morning on Thursday, research group Markit said that Germany's manufacturing purchasing managers' index fell to 52.3 last month from 52.5 in August. France's manufacturing PMI ticked up to 50.6 in September from 50.4 the previous month. Markit also reported that its manufacturing PMI for the entire euro zone came out at 52.0 in September, in line with expectations.
Although the British pound fell in tandem with euro in European morning and gbp/usd pair tanked briefly to 1.5108, buying interest above Wednesday's fresh 4-1/2 month trough at 1.5107 contained intra-day losses there and the pair edged higher afterwards. Later, investors shrugged off the weaker-than-expected UK manufacturing PMI data and pushed price higher to 1.5158, then 1.5181 in New York morning before retreating.
Research group Markit showed that manufacturing activity in the U.K. expanded at the slowest rate in three months in September. Markit said its U.K. manufacturing purchasing managers' index eased to 51.5 in September from a revised reading of 51.6 in August. Economists had expected the index to tick up to 51.3.
In other news, ECB's supervisory chief Daniele Nouy said on Thursday, 'while indications of financial stress have generally declined in recent months, global financial conditions remain volatile in some respects; for banks, the economic climate in the euro area poses challenges to their profitability; banks will have to review their business; models in order to stay profitable; some of the banks within the euro area still face significant credit risk.'
Senior German government official said at New York midday, 'U.S. monetary policy is big challenge, expects discussion at IMF meeting on timing of U.S. rate rise; expects discussion on euro zone inflation at IMF meeting to be "relaxed", falling prices largely due to falling oil and weak raw materials.'
Data to be released on Friday:
Japan all household spending, unemployment rate, Australia retail sales, Markit construction PMI for UK, euro zone producer prices , U.S. non-farm payroll, unemployment rate, average earnings, durable goods (revised), and factory orders.
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