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Market Review - 28/04/2009 21:06 GMT
Euro rallies against the dollar after comments from ECB's Smaghi
The euro rallied against the dollar on Tuesday, helped by the improving U.S. data and comments by European Central Bank Executive Board member Lorenzo Bini Smaghi, who suggested a foray into quantitative easing by the bank was not yet a done deal. Investors were encouraged to buy riskier assets and the euro surged to session highs of 1.3167, 126.88 and 0.8995 against the dollar, yen and sterling respectively.
Meanwhile, the British pound rebounded after falling to as low as 1.4518 against the dollar in European morning as Confederation of British Industry said U.K. index of retail sales rose this month to the highest level since January 2008 as stores overcame the recession and rising unemployment. The U.K. CBI distribution trade showed a net 3 percent reporting higher sales in April, compared with a net 44 percent saying sales fell last month. The sterling traded as high as 1.4692 against the dollar in New York morning before retreating on profit-taking and cross-selling in sterling (eur/gbp rose from 0.8882 to 0.8995).
Economic reports from the U.S. showed consumer confidence climbed in April to 39.2, the highest level since November, from 26.9 in the previous month, while a separate report signaled the housing market in U.S. may be stabilising as the decline in home prices in 20 major U.S. cities slowed in February for the first time since 2007. The better-than-expected U.S. sentiment reduced safe-haven demand and capped the dollar’s early gains due to fears about swine flu (the World Health Organisation lifted its pandemic alert to phase 4 from phase 3). In New York session, it fell from 96.78 to 96.34 against the yen, from 1.1599 to as low as 1.1420 versus the Swiss franc, and from 1.2269 to 1.2164 against the Canadian dollar.
On Wednesday, markets in Japan will be closed due to ‘Showa Emperor’s Day’. Economic data releases from other nations include eurozone business climate and economic sentiment, Switzerland’s KOF indicator, U.S. gross domestic price, personal consumption, PCE and Fed rate decision (18:15GMT), and New Zealand RBNZ rate decision (21:00GMT). The FOMC is expected to keep rates unchanged at 0.25 percent, however, the New Zealand central bank will probably cut the benchmark interest rate for a seventh consecutive time by 50 basis points to record-low pf 2.5 percent as a deepening global recession slows exports and business investment.
Euro rallies against the dollar after comments from ECB's Smaghi
The euro rallied against the dollar on Tuesday, helped by the improving U.S. data and comments by European Central Bank Executive Board member Lorenzo Bini Smaghi, who suggested a foray into quantitative easing by the bank was not yet a done deal. Investors were encouraged to buy riskier assets and the euro surged to session highs of 1.3167, 126.88 and 0.8995 against the dollar, yen and sterling respectively.
Meanwhile, the British pound rebounded after falling to as low as 1.4518 against the dollar in European morning as Confederation of British Industry said U.K. index of retail sales rose this month to the highest level since January 2008 as stores overcame the recession and rising unemployment. The U.K. CBI distribution trade showed a net 3 percent reporting higher sales in April, compared with a net 44 percent saying sales fell last month. The sterling traded as high as 1.4692 against the dollar in New York morning before retreating on profit-taking and cross-selling in sterling (eur/gbp rose from 0.8882 to 0.8995).
Economic reports from the U.S. showed consumer confidence climbed in April to 39.2, the highest level since November, from 26.9 in the previous month, while a separate report signaled the housing market in U.S. may be stabilising as the decline in home prices in 20 major U.S. cities slowed in February for the first time since 2007. The better-than-expected U.S. sentiment reduced safe-haven demand and capped the dollar’s early gains due to fears about swine flu (the World Health Organisation lifted its pandemic alert to phase 4 from phase 3). In New York session, it fell from 96.78 to 96.34 against the yen, from 1.1599 to as low as 1.1420 versus the Swiss franc, and from 1.2269 to 1.2164 against the Canadian dollar.
On Wednesday, markets in Japan will be closed due to ‘Showa Emperor’s Day’. Economic data releases from other nations include eurozone business climate and economic sentiment, Switzerland’s KOF indicator, U.S. gross domestic price, personal consumption, PCE and Fed rate decision (18:15GMT), and New Zealand RBNZ rate decision (21:00GMT). The FOMC is expected to keep rates unchanged at 0.25 percent, however, the New Zealand central bank will probably cut the benchmark interest rate for a seventh consecutive time by 50 basis points to record-low pf 2.5 percent as a deepening global recession slows exports and business investment.
