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Market Review - 01/06/2009 20:55
All times in GMT
Euro rises versus the greenback as risk appetite improves
The dollar fell against euro as reports from the U.S and China showed the global economy was on the road to recovery boosted demand for higher-yielding assets. In addition, the ICE index, which tracks the greenback against a basket of six currencies fell to a new low for 2009 at 78.59 in late New York morning trade after the U.S. government said it will own a majority of General Motors Corp., removing some uncertainty over the ailing U.S. auto industry. However, the euro trimmed gains as investors took profits near the close of the U.S. session.
Euro extended its recent rise to 1.4246 against the dollar in European morning after the release better-than-expected German manufacturing PMI (39.6 versus forecast of 39.1) and the eurozone manufacturing PMI which also beat economists’ expectations (40.7 versus 40.5). However, the euro retreated in New York morning as the U.S. core PCE data, the major measure of U.S. inflation, came out at 0.3% in April higher than forecast of 0.2% and the ISM manufacturing data showed the manufacturing sector is still contracting even at a slower rate (42.8 in May compared to 40.1 in April).
The British pound maintained its firm undertone and advanced to as high as 1.6497 versus the dollar after U.K. manufacturing PMI index in May rose to 45.4 compared to 43.1 in April and stronger-than-expected house prices data from last week added credence to the view that the U.K. is recovering from the worst of its recession. However, cable gave up some gains against the greenback in late New York session due to long liquidation. Cross buying also supported sterling, with eur/gbp dropping to a new 2009 low of 0.8602 while gbp/jpy rallied to 159.18.
The Japanese yen fell broadly as investors became more risk-aggressive and resumed accumulation of carry trades. Eur/jpy rallied to 137.25, aud/jpy jumped to 78.57 while gbp/jpy rise to a multi-month high of 159.18.
Earlier in the day, although the Purchasing Manager’s Index for China dropped slightly to a seasonally adjusted 53.1 in May from 53.5 in April, the reading stayed above 50, which means the purchasing activity in China was still expanding in May. The data drove the SSE Composite index in China up by around 3.30%.
Data to be released on Tuesday includes Australia current account, RBA rate decision, Switzerland GDP, U.K. housing price, construction PMI, eurozone unemployment and U.S. pending home sales data.
Euro rises versus the greenback as risk appetite improves
The dollar fell against euro as reports from the U.S and China showed the global economy was on the road to recovery boosted demand for higher-yielding assets. In addition, the ICE index, which tracks the greenback against a basket of six currencies fell to a new low for 2009 at 78.59 in late New York morning trade after the U.S. government said it will own a majority of General Motors Corp., removing some uncertainty over the ailing U.S. auto industry. However, the euro trimmed gains as investors took profits near the close of the U.S. session.
Euro extended its recent rise to 1.4246 against the dollar in European morning after the release better-than-expected German manufacturing PMI (39.6 versus forecast of 39.1) and the eurozone manufacturing PMI which also beat economists’ expectations (40.7 versus 40.5). However, the euro retreated in New York morning as the U.S. core PCE data, the major measure of U.S. inflation, came out at 0.3% in April higher than forecast of 0.2% and the ISM manufacturing data showed the manufacturing sector is still contracting even at a slower rate (42.8 in May compared to 40.1 in April).
The British pound maintained its firm undertone and advanced to as high as 1.6497 versus the dollar after U.K. manufacturing PMI index in May rose to 45.4 compared to 43.1 in April and stronger-than-expected house prices data from last week added credence to the view that the U.K. is recovering from the worst of its recession. However, cable gave up some gains against the greenback in late New York session due to long liquidation. Cross buying also supported sterling, with eur/gbp dropping to a new 2009 low of 0.8602 while gbp/jpy rallied to 159.18.
The Japanese yen fell broadly as investors became more risk-aggressive and resumed accumulation of carry trades. Eur/jpy rallied to 137.25, aud/jpy jumped to 78.57 while gbp/jpy rise to a multi-month high of 159.18.
Earlier in the day, although the Purchasing Manager’s Index for China dropped slightly to a seasonally adjusted 53.1 in May from 53.5 in April, the reading stayed above 50, which means the purchasing activity in China was still expanding in May. The data drove the SSE Composite index in China up by around 3.30%.
Data to be released on Tuesday includes Australia current account, RBA rate decision, Switzerland GDP, U.K. housing price, construction PMI, eurozone unemployment and U.S. pending home sales data.
