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Market Review - 23/11/2007 22:38 GMT
Euro retreats on profit-taking after hitting a record high of 1.4968
The single currency rallied to a fresh record high of 1.4968 against the U.S. currency in Asian morning on Friday, however, investors took profits on the euro's recent rise ahead of the key psychological level of 1.5000 after European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said he saw a greater-than-expected economic slowdown in the euro zone, adding speculation that ECB may not raise interest rates in the coming policy meeting. Ordonez also said there was not enough data to dispel uncertainty about the effects of the financial market turmoil, reminding investors that the fallout from the credit crisis is not limited to the United States.
Euro subsequently retreated to 1.4784 and then traded sideways in a thin U.S. session. Moves in currencies on Friday were exacerbated by thin liquidity following the Thanksgiving holiday in the United States on Thursday as some traders in the U.S. were still on vacation. Japan's financial market was closed on Friday for the Labour Thanksgiving public holiday.
The British pound tumbled after a report showed U.K. economic growth unexpectedly slowed to the weakest pace in a year during the third quarter. U.K. gross domestic product rose 0.7% (previous estimate was 0.8%) in the three months through September. The annual growth rate was 3.2%, also lower than the previously estimated 3.3% rise. Cable fell sharply from 2.0765 to 2.0517 before recovering and closed at 2.0632. Sterling dropped to 0.7217 per euro, the lowest since 2003.
The greenback fell to a record low against the Swiss franc of 1.0899 as investors were worried about the fallout from credit market problems and the impact on the broader economy. However, the pair rebounded strongly to 1.1049 on short-covering in Europe before trading sideways in U.S. The U.S. currency also weakened versus the Japanese yen to 107.55 before rebounding to 108.55 and closed at 108.30 on Friday.
Next week will see the release of New Zealand trade balance on Monday; German Ifo index, U.S. consumer confidence and Midwest manufacturing on Tuesday; Japan’s retail sales, German Gfk index, U.S. durable goods, existing home sales and Fed’s Beige book on Wednesday; Japan’s industrial production, German unemployment rate, U.K. CBI distribution trade, U.S. core PCE, personal consumption, jobless claims and new home sales on Thursday; and Japan’s Tokyo CPI, eurozone GDP and business climate, U.K. Gfk survey and U.S. Chicago PMI and construction spending.
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Market Review - 23/11/2007 22:38 GMT
Euro retreats on profit-taking after hitting a record high of 1.4968
The single currency rallied to a fresh record high of 1.4968 against the U.S. currency in Asian morning on Friday, however, investors took profits on the euro's recent rise ahead of the key psychological level of 1.5000 after European Central Bank Governing Council member Miguel Angel Fernandez Ordonez said he saw a greater-than-expected economic slowdown in the euro zone, adding speculation that ECB may not raise interest rates in the coming policy meeting. Ordonez also said there was not enough data to dispel uncertainty about the effects of the financial market turmoil, reminding investors that the fallout from the credit crisis is not limited to the United States.
Euro subsequently retreated to 1.4784 and then traded sideways in a thin U.S. session. Moves in currencies on Friday were exacerbated by thin liquidity following the Thanksgiving holiday in the United States on Thursday as some traders in the U.S. were still on vacation. Japan's financial market was closed on Friday for the Labour Thanksgiving public holiday.
The British pound tumbled after a report showed U.K. economic growth unexpectedly slowed to the weakest pace in a year during the third quarter. U.K. gross domestic product rose 0.7% (previous estimate was 0.8%) in the three months through September. The annual growth rate was 3.2%, also lower than the previously estimated 3.3% rise. Cable fell sharply from 2.0765 to 2.0517 before recovering and closed at 2.0632. Sterling dropped to 0.7217 per euro, the lowest since 2003.
The greenback fell to a record low against the Swiss franc of 1.0899 as investors were worried about the fallout from credit market problems and the impact on the broader economy. However, the pair rebounded strongly to 1.1049 on short-covering in Europe before trading sideways in U.S. The U.S. currency also weakened versus the Japanese yen to 107.55 before rebounding to 108.55 and closed at 108.30 on Friday.
Next week will see the release of New Zealand trade balance on Monday; German Ifo index, U.S. consumer confidence and Midwest manufacturing on Tuesday; Japan’s retail sales, German Gfk index, U.S. durable goods, existing home sales and Fed’s Beige book on Wednesday; Japan’s industrial production, German unemployment rate, U.K. CBI distribution trade, U.S. core PCE, personal consumption, jobless claims and new home sales on Thursday; and Japan’s Tokyo CPI, eurozone GDP and business climate, U.K. Gfk survey and U.S. Chicago PMI and construction spending.
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