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Daily Market Outlook

Wed, Sep 30 2009, 02:50 GMT

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  Market Review - 29/09/2009 20:22      All times in GMT  
Yen retreats as Fujii rebuffs previous non-intervening stance

The Japanese yen retreated for the second day against the greenback amid thin trading volume ahead of quarter-end. In early Asian trading, Japan Finance Minister Hirohisa Fujii rebuffed his previous non-intervening stance, saying that 'present currency moves are too sudden' and 'currency intervention is possible under extreme circumstances'. Dollar-yen bounced to 90.23 after his comments and despite subsequent retreat in European morning, price rose again to as high as 90.37 as dollar gained broadly due to weaker-than-expected U.S. consumer confidence (53.1 versus forecast of 57.0 in September).  
 
Despite dipping initially in Australian morning, the single currency rose in Asian session on the back of strong regional equities and reached an intra-day high of 1.4646. However, price fell from there as traders aimed to trigger stops below Monday's low of 1.4565 (heavy cross selling in eur/gbp also pressured the euro) and price declined to 1.4526 after the release of U.S. consumer confidence before staging a rebound in late New York session. 
 
Cable rose initially in tandem with euro in European morning but then tumbled to 1.5824 as traders expected the U.K. current account to worsen. However, it was a tale of sell on rumours and buy on facts as massive profit taking and active cross buying against euro lifted sterling and price rallied to as high as 1.5990 before retreating in U.S. session on the back of dollar's brief rise. 
 
Economic data to be released on Wednesday include: 
Gfk survey index in U.K.; manufacturing PMI, industrial production, construction orders and housing starts in Japan; retail sales in Australia; unemployment change in Germany; HICP in eurozone; KOF indicator in Switzerland; ADP employment, PCE, GDP, personal consumption and Chicago PMI in U.S.; GDP and PPI in Canada.

Published on  Wed, Sep 30 2009, 03:05 GMT