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Market Review - 29/11/2007 22:20 GMT
British pound tumbles as U.K. house prices decline by the most in 12 years
The British pound tumbled from 2.0807 to 2.0594 on Thursday, paring all the Wednesday’s gains as U.K. house prices declined by the most in 12 years in November. The Nationwide house price index unexpectedly fell by 0.8% (forecast was a rise of 0.1%).
The greenback rebounded against the euro on concerns the reluctance of banks to lend is spreading to Europe together with the dollar-supportive comments from Goldman Chief Economist Jim O'Neill. O’Neill said the dollar's slide may soon end and forecasted ‘a gradual relaxation of credit concerns in the financial sector over the coming months’. The comments prompted investors to take profits on the dollar’s recent broad-based weakness against European currencies. The single currency pared all of Wednesday’s gains against the dollar and fell from 1.4844 to 1.4723.
The cost of borrowing in euros for one month rose by a record and dollar loans increased the most in more than a decade as banks sought funds to cover their commitments through to the start of next year. Interest-rates futures showed a 100 percent chance the Fed will lower its target for overnight loans between banks by at least a quarter-percentage point to 4.25% on Dec. 11. The chance of a cut to 4% is 26%.
On the data front, U.S. weekly jobless claims jumped to 352,000, much higher the expectation of 332,000 and the previous week’s 329,000. The third-quarter U.S. economic growth came in line with expectations, however, the data had little impact on the dollar.
The greenback rebounded against the Canadian dollar to 0.9995 after the release of Canada’s current account which showed the surplus in the third quarter dropped to C$1.04 billion, the lowest in four years, from C$6.35 billion in second quarter as a result of the Canadian dollar’s appreciation.
The U.S. currency retreated against the Japanese yen from 110.32 to 109.47 on Thursday due to cross buying in yen versus high-yielding currencies. Euro, aussie and sterling fell versus the Japanese unit from 163.62 to 161.56, from 97.89 to 96.25 and from 229.20 to 225.81 respectively.
Friday will see the release of Japan’s unemployment rate, Tokyo CPI, household spending, German retail sales, eurozone GDP, business climate and eurozone CPI, U.K. Gfk index, U.S. core PCE, personal spending, Chicago PMI and construction spending. Federal Reserve Chairman Ben S. Bernanke will speak at 23:00GMT in Charlotte, North Carolina.
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Market Review - 29/11/2007 22:20 GMT
British pound tumbles as U.K. house prices decline by the most in 12 years
The British pound tumbled from 2.0807 to 2.0594 on Thursday, paring all the Wednesday’s gains as U.K. house prices declined by the most in 12 years in November. The Nationwide house price index unexpectedly fell by 0.8% (forecast was a rise of 0.1%).
The greenback rebounded against the euro on concerns the reluctance of banks to lend is spreading to Europe together with the dollar-supportive comments from Goldman Chief Economist Jim O'Neill. O’Neill said the dollar's slide may soon end and forecasted ‘a gradual relaxation of credit concerns in the financial sector over the coming months’. The comments prompted investors to take profits on the dollar’s recent broad-based weakness against European currencies. The single currency pared all of Wednesday’s gains against the dollar and fell from 1.4844 to 1.4723.
The cost of borrowing in euros for one month rose by a record and dollar loans increased the most in more than a decade as banks sought funds to cover their commitments through to the start of next year. Interest-rates futures showed a 100 percent chance the Fed will lower its target for overnight loans between banks by at least a quarter-percentage point to 4.25% on Dec. 11. The chance of a cut to 4% is 26%.
On the data front, U.S. weekly jobless claims jumped to 352,000, much higher the expectation of 332,000 and the previous week’s 329,000. The third-quarter U.S. economic growth came in line with expectations, however, the data had little impact on the dollar.
The greenback rebounded against the Canadian dollar to 0.9995 after the release of Canada’s current account which showed the surplus in the third quarter dropped to C$1.04 billion, the lowest in four years, from C$6.35 billion in second quarter as a result of the Canadian dollar’s appreciation.
The U.S. currency retreated against the Japanese yen from 110.32 to 109.47 on Thursday due to cross buying in yen versus high-yielding currencies. Euro, aussie and sterling fell versus the Japanese unit from 163.62 to 161.56, from 97.89 to 96.25 and from 229.20 to 225.81 respectively.
Friday will see the release of Japan’s unemployment rate, Tokyo CPI, household spending, German retail sales, eurozone GDP, business climate and eurozone CPI, U.K. Gfk index, U.S. core PCE, personal spending, Chicago PMI and construction spending. Federal Reserve Chairman Ben S. Bernanke will speak at 23:00GMT in Charlotte, North Carolina.
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