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Market Review - 26/05/2009 20:55 All times in GMT
Euro rebounds strongly on upbeat U.S. consumer confidence data
Euro rebounded strongly on Tuesday after the release of much better-than-expected U.S. consumer index, with the data also boosting U.S. equities as investors became more optimistic the worst of the global recession is over. Although North Korea had test-fired two more missiles off its east coast, the reaction in the currency market was somewhat muted and the dollar remained around its five month-low against a basket of currencies at the moment.
Earlier in the day, euro weakened against the greenback after Britain’s Daily Telegraph reported that Germany’s regulator BaFin was questioning the health of the German banking system as the toxic debt of the country’s banks would get worse unless they joined the rescue plan offered by the government. The single currency hit an intra-day low of 1.3860 versus the dollar in European session even though German GDP data was in line with forecasts at –3.8% Q/Q and –6.7% Y/Y. However, the data confirmed Germany’s economy shrank in the first three months of the year at its fastest rate since its reunification in 1990.
The single currency then rebounded from there due to profit taking ahead of U.S. opening and it erased most of its losses against the dollar on the back of stronger-than-expected U.S. consumer confidence data (54.9 versus forecast 42.0 in May and from an upwardly-revised 40.8 in April). Eur/usd traded as high as 1.4005 in New York session. DJI ended the day up 196 points or 2.37%, Nasdaq up 58.42 or 3.45% and S&P up 23.33 or 2.63%.
Although the sterling fell in tandem with the euro to as low as 1.5778 in European trading, it also rallied from there to hit a fresh high for 2009 at 1.5970 on the robust U.S consumer data before retreating due to profit taking purposes. The Canadian dollar came under pressure earlier in the day due to weak oil prices before rising from 1.1356 to a seven-month high at 1.1155 versus the greenback.
Economic data releases on Wednesday include Japan BoJ minutes for April, trade balance, Australia Westpac leading indicator, German CPI and HICP, U.S. existing home sales and home price index. U.S. Treasury Secretary Geithner will make a speech.
Euro rebounds strongly on upbeat U.S. consumer confidence data
Euro rebounded strongly on Tuesday after the release of much better-than-expected U.S. consumer index, with the data also boosting U.S. equities as investors became more optimistic the worst of the global recession is over. Although North Korea had test-fired two more missiles off its east coast, the reaction in the currency market was somewhat muted and the dollar remained around its five month-low against a basket of currencies at the moment.
Earlier in the day, euro weakened against the greenback after Britain’s Daily Telegraph reported that Germany’s regulator BaFin was questioning the health of the German banking system as the toxic debt of the country’s banks would get worse unless they joined the rescue plan offered by the government. The single currency hit an intra-day low of 1.3860 versus the dollar in European session even though German GDP data was in line with forecasts at –3.8% Q/Q and –6.7% Y/Y. However, the data confirmed Germany’s economy shrank in the first three months of the year at its fastest rate since its reunification in 1990.
The single currency then rebounded from there due to profit taking ahead of U.S. opening and it erased most of its losses against the dollar on the back of stronger-than-expected U.S. consumer confidence data (54.9 versus forecast 42.0 in May and from an upwardly-revised 40.8 in April). Eur/usd traded as high as 1.4005 in New York session. DJI ended the day up 196 points or 2.37%, Nasdaq up 58.42 or 3.45% and S&P up 23.33 or 2.63%.
Although the sterling fell in tandem with the euro to as low as 1.5778 in European trading, it also rallied from there to hit a fresh high for 2009 at 1.5970 on the robust U.S consumer data before retreating due to profit taking purposes. The Canadian dollar came under pressure earlier in the day due to weak oil prices before rising from 1.1356 to a seven-month high at 1.1155 versus the greenback.
Economic data releases on Wednesday include Japan BoJ minutes for April, trade balance, Australia Westpac leading indicator, German CPI and HICP, U.S. existing home sales and home price index. U.S. Treasury Secretary Geithner will make a speech.
