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Market Review - 22/05/2009 19:44 All times in GMT
The single currency rallies on concerns over the credit rating of U.S.
The greenback declined to a two-month low against the single currency on Friday due to investors’ growing concerns about the AAA credit rating of the U.S. after Standard & Poor's downgraded Britain’s outlook from stable to negative the previous day. Also, recent optimistic views of the global economic recovery encouraged investors to become more risk-aggressive and dented the dollar’s safe-haven asset role.
Euro rallied against the U.S. currency to as high as 1.4051 in New York afternoon session on concerns over the strength of credit rating of the U.S. Although the pound retreated briefly from its Asian high at 1.5898 to 1.5757 against the dollar in European afternoon due to rumours that U.K. GDP data could be worse than market expectation, the data came in line with forecast of –1.9% Q/Q and –4.1% Y/Y. Cable then found renewed buying from there on dollar's weakness elsewhere and rallied to a new 2009 high of 1.5947 on Friday.
Earlier in the day, the Bank of Japan announced that the target lending rate will stay at 0.1% and it raised its economic forecast for the first time since July 2006. Finance Minister Yosano stated that the government isn’t considering to intervene in the currency market at this point. The Japanese yen briefly strengthened against the dollar to as low as 93.85 before retreating to 94.92 in New York trading on profit-taking together with renewed cross selling in yen. Euro, sterling and aussie rallied from 130.75 to 132.98, from 148.20 to 151.07 and from 73.12 to 74.52 respectively versus the yen.
The greenback fell against the Canadian dollar to the lowest in more than seven months at 1.1187 against the loonie as Canada's retail sales rose for a third straight month in March (+0.3% vs market expectation of 0.5%).
Monday will be a market holiday in the U.S. and Britain. Data to be released in the coming week include Japan all industry index n BoJ’s March monthly report, Germany Ifo index on Monday; Japan's CSPI, German GDP, import price index, U.K. Nationwide housing prices, eurozone industrial orders, current account and U.S. consumer confidence on Tuesday; BoJ meeting minutes for April 28 meeting, Germany CPI and HICP index, U.S housing data on Wednesday; Japan retail sales, German unemployment data, eurozone business climate and economic sentiment, U.K. CBI distribution trade, U.S. durable orders, jobless claims, new home sales and Midwest manufacturing index on Thursday; U.K. Gfk survey, Japan manufacturing PMI, CPI, unemployment rate, industrial production, German retail sales, eurozone unemployment rate and HICP, Swiss KOF indicator, Canada current account and U.S. GDP, PCE, Chicago PMI and University of Michigan survey on Friday.
The single currency rallies on concerns over the credit rating of U.S.
The greenback declined to a two-month low against the single currency on Friday due to investors’ growing concerns about the AAA credit rating of the U.S. after Standard & Poor's downgraded Britain’s outlook from stable to negative the previous day. Also, recent optimistic views of the global economic recovery encouraged investors to become more risk-aggressive and dented the dollar’s safe-haven asset role.
Euro rallied against the U.S. currency to as high as 1.4051 in New York afternoon session on concerns over the strength of credit rating of the U.S. Although the pound retreated briefly from its Asian high at 1.5898 to 1.5757 against the dollar in European afternoon due to rumours that U.K. GDP data could be worse than market expectation, the data came in line with forecast of –1.9% Q/Q and –4.1% Y/Y. Cable then found renewed buying from there on dollar's weakness elsewhere and rallied to a new 2009 high of 1.5947 on Friday.
Earlier in the day, the Bank of Japan announced that the target lending rate will stay at 0.1% and it raised its economic forecast for the first time since July 2006. Finance Minister Yosano stated that the government isn’t considering to intervene in the currency market at this point. The Japanese yen briefly strengthened against the dollar to as low as 93.85 before retreating to 94.92 in New York trading on profit-taking together with renewed cross selling in yen. Euro, sterling and aussie rallied from 130.75 to 132.98, from 148.20 to 151.07 and from 73.12 to 74.52 respectively versus the yen.
The greenback fell against the Canadian dollar to the lowest in more than seven months at 1.1187 against the loonie as Canada's retail sales rose for a third straight month in March (+0.3% vs market expectation of 0.5%).
Monday will be a market holiday in the U.S. and Britain. Data to be released in the coming week include Japan all industry index n BoJ’s March monthly report, Germany Ifo index on Monday; Japan's CSPI, German GDP, import price index, U.K. Nationwide housing prices, eurozone industrial orders, current account and U.S. consumer confidence on Tuesday; BoJ meeting minutes for April 28 meeting, Germany CPI and HICP index, U.S housing data on Wednesday; Japan retail sales, German unemployment data, eurozone business climate and economic sentiment, U.K. CBI distribution trade, U.S. durable orders, jobless claims, new home sales and Midwest manufacturing index on Thursday; U.K. Gfk survey, Japan manufacturing PMI, CPI, unemployment rate, industrial production, German retail sales, eurozone unemployment rate and HICP, Swiss KOF indicator, Canada current account and U.S. GDP, PCE, Chicago PMI and University of Michigan survey on Friday.
