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Market Review - 11/06/2009 21:22 All times in GMT
Dollars falls broadly as improved risk appetite reduces safe-haven appeal
The greenback fell across the board on Thursday as stronger-than-expected weekly jobless claims and retail sales data boosted hopes of an economic recovery and encouraged investors to search for assets with higher yields. In addition, the dollar extended losses versus a basket of currencies due to the increased demand for 30-year U.S. government bonds.
The British pound rose after the release of Bank of England inflation attitudes survey which showed British inflation expectations for the coming year rose to 2.4% in May from 2.1% in February (first rise since August '08). Although sterling initially retreated after U.S. posted better-than-expected weekly jobless claims data (601,000 versus the readings of 625,000 from previous week) and retail sales came in at 0.5% in May compared to –0.2% in April, cable rallied again as high demand for the U.S. long-term debt auction further diminished the allure of the U.S. currency as a safe-haven investment. The British pound touched a session high of 1.6622 against the greenback in New York afternoon before easing. Cross buying versus euro and yen also lifted sterling with eur/gbp dropping to a new 2009 low of 0.8500 while gbp/jpy surged to a multi-month high of 162.07.
Although euro fell briefly to an intra-day low of 1.3943 against the dollar after the release of U.S. jobless claims and retail sales data, the single currency rallied from there to as high as 1.4178 against the greenback before retreating due to profit-taking. The Japanese yen also strengthened against the greenback to as high as 97.28 while the Swiss Franc hit a session high of 1.0649 versus the U.S. dollar.
Earlier in the day, Reserve Bank of New Zealand kept the official cash rate at 2.50% unchanged. The New Zealand dollar rose to 0.6474 against the greenback in New York afternoon. Australia posted a much better-than-expected employment change (-1,700 in May compared to forecast of –30,000) and aussie dollar jumped to as high as 0.8238 against the U.S. currency. The surge in oil prices (crude oil futures closed up 1.89% to $72.68/barrel) also supported loonie and usd/cad touched an intra-day low of 1.0948 before rebounding due to short-covering.
Data to be released on Friday include Japan capacity utilisation, industrial production, consumer confidence, eurozone industrial production and the U.S. University of Michigan sentiment survey.
Dollars falls broadly as improved risk appetite reduces safe-haven appeal
The greenback fell across the board on Thursday as stronger-than-expected weekly jobless claims and retail sales data boosted hopes of an economic recovery and encouraged investors to search for assets with higher yields. In addition, the dollar extended losses versus a basket of currencies due to the increased demand for 30-year U.S. government bonds.
The British pound rose after the release of Bank of England inflation attitudes survey which showed British inflation expectations for the coming year rose to 2.4% in May from 2.1% in February (first rise since August '08). Although sterling initially retreated after U.S. posted better-than-expected weekly jobless claims data (601,000 versus the readings of 625,000 from previous week) and retail sales came in at 0.5% in May compared to –0.2% in April, cable rallied again as high demand for the U.S. long-term debt auction further diminished the allure of the U.S. currency as a safe-haven investment. The British pound touched a session high of 1.6622 against the greenback in New York afternoon before easing. Cross buying versus euro and yen also lifted sterling with eur/gbp dropping to a new 2009 low of 0.8500 while gbp/jpy surged to a multi-month high of 162.07.
Although euro fell briefly to an intra-day low of 1.3943 against the dollar after the release of U.S. jobless claims and retail sales data, the single currency rallied from there to as high as 1.4178 against the greenback before retreating due to profit-taking. The Japanese yen also strengthened against the greenback to as high as 97.28 while the Swiss Franc hit a session high of 1.0649 versus the U.S. dollar.
Earlier in the day, Reserve Bank of New Zealand kept the official cash rate at 2.50% unchanged. The New Zealand dollar rose to 0.6474 against the greenback in New York afternoon. Australia posted a much better-than-expected employment change (-1,700 in May compared to forecast of –30,000) and aussie dollar jumped to as high as 0.8238 against the U.S. currency. The surge in oil prices (crude oil futures closed up 1.89% to $72.68/barrel) also supported loonie and usd/cad touched an intra-day low of 1.0948 before rebounding due to short-covering.
Data to be released on Friday include Japan capacity utilisation, industrial production, consumer confidence, eurozone industrial production and the U.S. University of Michigan sentiment survey.
