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Market Review - 16/02/2007 22:31 GMT
Dollar falls to two-month lows against yen on weak U.S. economic data
The dollar remained under pressure on Friday, falling to its lowest level in two months against the yen as more data out of the U.S. came in below market forecasts. Housing starts for January dropped to 1.41 million from 1.64 million in the previous month while the University of Michigan consumer sentiment survey also unexpectedly slipped to 93.3 in February from 96.9 in January, with economists expecting a slight rise to 97.0.
Trading volume was thinner than earlier in the week due to the long weekend in the U.S. with Monday being a market holiday (President's Day) and liquidation of positions limited the greenback's downside.
The dollar briefly fell to 118.98 against the yen before recovering to 119.43 due to buying by major accounts as well on cross unwinding in yen, however, usd/jpy was well off Monday's high at 122.10. The euro was relatively unchanged on Friday, ending the week at 1.3139 while usd/chf closed at 1.2345. Cross selling in sterling pushed cable down to 1.9463 before price rebounded to 1.9495 on profit-taking.
Data releases earlier in the week painted a bleaker picture for the U.S. economy and interest rate futures reflected an increased probability that the Fed would cut rates in its next meeting on March 21. The rebound in the yen for the week was attributed to cross unwinding and speculation that the Bank of Japan was looking to hike rates on February 21 from its present level of 0.25 percent.
Rightmove house prices are due out of the U.K. on Monday, along with Canadian wholesale trade for December. Market focus will be on the Bank of Japan monetary policy announcement and U.S. consumer prices, to be released on Wednesday.
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www.AceTraderFX.com
Market Review - 16/02/2007 22:31 GMT
Dollar falls to two-month lows against yen on weak U.S. economic data
The dollar remained under pressure on Friday, falling to its lowest level in two months against the yen as more data out of the U.S. came in below market forecasts. Housing starts for January dropped to 1.41 million from 1.64 million in the previous month while the University of Michigan consumer sentiment survey also unexpectedly slipped to 93.3 in February from 96.9 in January, with economists expecting a slight rise to 97.0.
Trading volume was thinner than earlier in the week due to the long weekend in the U.S. with Monday being a market holiday (President's Day) and liquidation of positions limited the greenback's downside.
The dollar briefly fell to 118.98 against the yen before recovering to 119.43 due to buying by major accounts as well on cross unwinding in yen, however, usd/jpy was well off Monday's high at 122.10. The euro was relatively unchanged on Friday, ending the week at 1.3139 while usd/chf closed at 1.2345. Cross selling in sterling pushed cable down to 1.9463 before price rebounded to 1.9495 on profit-taking.
Data releases earlier in the week painted a bleaker picture for the U.S. economy and interest rate futures reflected an increased probability that the Fed would cut rates in its next meeting on March 21. The rebound in the yen for the week was attributed to cross unwinding and speculation that the Bank of Japan was looking to hike rates on February 21 from its present level of 0.25 percent.
Rightmove house prices are due out of the U.K. on Monday, along with Canadian wholesale trade for December. Market focus will be on the Bank of Japan monetary policy announcement and U.S. consumer prices, to be released on Wednesday.
>SIGN UP for 1-week TRIAL<
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