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Market Review - 19/06/2009 21:46 All times in GMT
Dollar falls broadly as improved risk appetite reduces safe-haven appeal
The greenback fell across the board on Friday as growing optimism that the global recession is easing dented dollar's safe-haven appeal. Investors are more risk-aggressive and more willing to buy in higher-yielding assets. In late New York trading, the ICE future dollar index, which measures the dollar's strength against a basket of six other major currencies, dropped 0.33 percent to trade at around 80.24, while the U.S. dollar slipped to as low as 96.00 versus the Japanese yen and 1.0765 against the Swiss franc before rebounding due to short-covering in late New York afternoon session.
Euro rose versus the U.S. currency as a batch of recent upbeat data boosted hopes that global economy is on the path to recovery. In addition, the International Monetary Fund (IMF) First Deputy Managing Director John Lipsky said that IMF is likely to revise its 2010 growth forecast for the world economy up with signs the rate of decline in global output has moderated. However, he warned that the world-wide financial conditions are far from normal and the global economy is still in recession. As the risk appetite of investors improved, euro jumped to an intra-day high of 1.4013 versus the greenback at the close of European session before retreating partly due to the selloff in crude oil prices (crude oil JULY futures tumbled below 70.00 and fell by $2.09 to $69.28 per barrel) Furthermore, European Union leaders agreed to create a European system of financial supervisors with limited powers to avert a repeat of banking crisis that has destroyed the world economy.
The British pound rose against the dollar to as high as 1.6562 in New York afternoon session after Bank of England Governor Mervyn King said that the policy makers have evidence that contraction in the U.K. economy is moderating. King also added that U.K. will definitely recover from the worst recession since 1979 and go back to an ordinary business cycle. The rise in FTSE 100 index (closed up 1.52%) also bolstered demand for the British pound. Cross buying versus euro and yen also lifted sterling with eur/gbp dropping from 0.8529 to 0.8446 while gbp/jpy surged from 157.43 to as high as 159.62. In late New York afternoon, the pound retreated from the session high partly due to profit taking.
Data to be released next week include U.K Rightmove house price, Japan tertiary industry index, German Ifo index on Monday, Japan leading indicators, German Gfk index, import price index, service and manufacturing PMI, Switzerland trade balance, U.S. home price on Tuesday, Japan CSPI, trade balance, eurozone current account, U.K. CBI distribution trade, U.S. durable goods, new home sales, and Fed rate decision on Wednesday, New Zealand current account, eurozone industrial orders, U.S. GDP and jobless claims on Thursday, New Zealand GDP, Japan CPI, Switzerland KOF indicator, U.S. PCE and University of Michigan survey on Friday.
Dollar falls broadly as improved risk appetite reduces safe-haven appeal
The greenback fell across the board on Friday as growing optimism that the global recession is easing dented dollar's safe-haven appeal. Investors are more risk-aggressive and more willing to buy in higher-yielding assets. In late New York trading, the ICE future dollar index, which measures the dollar's strength against a basket of six other major currencies, dropped 0.33 percent to trade at around 80.24, while the U.S. dollar slipped to as low as 96.00 versus the Japanese yen and 1.0765 against the Swiss franc before rebounding due to short-covering in late New York afternoon session.
Euro rose versus the U.S. currency as a batch of recent upbeat data boosted hopes that global economy is on the path to recovery. In addition, the International Monetary Fund (IMF) First Deputy Managing Director John Lipsky said that IMF is likely to revise its 2010 growth forecast for the world economy up with signs the rate of decline in global output has moderated. However, he warned that the world-wide financial conditions are far from normal and the global economy is still in recession. As the risk appetite of investors improved, euro jumped to an intra-day high of 1.4013 versus the greenback at the close of European session before retreating partly due to the selloff in crude oil prices (crude oil JULY futures tumbled below 70.00 and fell by $2.09 to $69.28 per barrel) Furthermore, European Union leaders agreed to create a European system of financial supervisors with limited powers to avert a repeat of banking crisis that has destroyed the world economy.
The British pound rose against the dollar to as high as 1.6562 in New York afternoon session after Bank of England Governor Mervyn King said that the policy makers have evidence that contraction in the U.K. economy is moderating. King also added that U.K. will definitely recover from the worst recession since 1979 and go back to an ordinary business cycle. The rise in FTSE 100 index (closed up 1.52%) also bolstered demand for the British pound. Cross buying versus euro and yen also lifted sterling with eur/gbp dropping from 0.8529 to 0.8446 while gbp/jpy surged from 157.43 to as high as 159.62. In late New York afternoon, the pound retreated from the session high partly due to profit taking.
Data to be released next week include U.K Rightmove house price, Japan tertiary industry index, German Ifo index on Monday, Japan leading indicators, German Gfk index, import price index, service and manufacturing PMI, Switzerland trade balance, U.S. home price on Tuesday, Japan CSPI, trade balance, eurozone current account, U.K. CBI distribution trade, U.S. durable goods, new home sales, and Fed rate decision on Wednesday, New Zealand current account, eurozone industrial orders, U.S. GDP and jobless claims on Thursday, New Zealand GDP, Japan CPI, Switzerland KOF indicator, U.S. PCE and University of Michigan survey on Friday.
