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Daily Market Outlook

Thu, Nov 26 2009, 00:17 GMT

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Market Review - 25/11/2009 22:29       All times in GMT   
Dollar index tumbles to a fresh 15-month low as robust U.S. data dampens greenback's safe-haven appeal

The greenback fell across the board on Wednesday as a batch of upbeat U.S. economic data encouraged investors to buy higher-yielding assets. U.S. jobless claims came in at 466,000 last week, well below economists' expectation of 500,000 and the downwardly-revised 501,000 for the previous week. University of Michigan U.S. consumer sentiment index came in at 67.4, higher than the consensus forecast of 67.0, while U.S. new homes sales rose by 6.2% to a 430,000 unit annual rate (expectation was 410,000). In addition, the Fed's tolerance on weaker dollar showed on its November minutes released on Tuesday still weighed on the greenback.   
  
The Japanese yen strengthened versus most of its counterparts on Wednesday. Usd/jpy tumbled to a 10-month low of 87.21 in late New York session. Eur/jpy dropped from 132.70 to 131.51, aud/jpy declined 81.99 to 80.95 while gbp/jpy hit an intra-day low of 145.68 in late New York afternoon.  
  
European currencies strengthened against the buck on Wednesday amid the greenback's broad-based weakness. Eur/usd hit a fresh 15-month high of 1.5145 while usd/chf dropped to as low as 0.9955, the lowest since April 2009. Sterling briefly rallied to a session high of 1.6747 in European morning before retreating in NY session. Earlier, the Office for National Statistics reported that the British economy shrank by 0.3 percent in the third quarter, compared to a previous estimate of a 0.4 percent contraction. In addition, European Central Bank governing council member Ivan Sramko said that the eurozone economy will perform better than previously forecast in both 2009 n 2010. Russia's central bank said that it was preparing to invest some of its foreign exchange reserves in Canadian dollars in order to diversify its currency portfolio.  
  
Spot gold price rose to another record high of $1191.10 an ounce in late New York trade on news that the IMF sold 10 tonnes of gold to Sri Lanka. Furthermore, a report showed that India is open to buy more gold from the IMF.  
  
U.S. markets will be closed on Thursday for Thanksgiving holiday. Data to be released on Thursday include U.K. CBI distribution trade and German CPI.

Published on  Thu, Nov 26 2009, 00:19 GMT