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Market Review - 07/10/2009 20:17 All times in GMT
Dollar rebounds against euro on short covering and weak European GDP data
The greenback rebounded against euro and Swiss franc on Wednesday due to short-covering amid thin trading volume and weaker-than-expected GDP data in Eurozone. Eurozone GDP in the second quarter came out at -0.2%, worse than the expected figure of -0.1% (while yearly figure came out as -4.8%, also worse than forecast of -4.7%). Traders took the weak data as an excuse to square their early short dollar positions (as no major data was due out in the U.S.), the greenback rebounded against euro and franc from Tuesday low of 1.4763 and 1.0237 to as high as 1.4650 and 1.0360 respectively.
The single currency remained firm in Asian and early European sessions as rise in regional equities spurred risk appetite and gave support to risky assets. However, euro retreated from 1.4737 on long liquidation and cross selling in eur/gbp and also in part due to the GDP data (despite the better-than-expected German factory orders which came out as 1.4% versus forecast of 1.2%), price dropped to as low as 1.4650 in U.S. afternoon before recovering.
The British pound was under pressure in Asian session under the effect of weak U.K. industrial production data on Tuesday but trading volume was thin and price traded sideways for the whole day until cross buying against euro emerged in late U.S. session and sterling briefly rose to 1.5972 before retreating.
Dollar-yen fell to an 8-month low of 88.01 in European session due to active cross buying in yen but price rebounded from there strongly to 89.40 on option-defensive buying and Finance Minister Fujii's comments that 'If the yen’s movements become abnormal or disorderly, we will need to consider some action'. However, the pair met renewed selling and retreated in New York afternoon.
Economic data to be released on Wednesday:
Japan current account, economic watcher survey, machine tool orders, Australia unemployment rate, German industrial production, U.K. BoE rate decision, ECB rate decision, U.S. jobless claims, wholesales inventories, Canada housing starts
Dollar rebounds against euro on short covering and weak European GDP data
The greenback rebounded against euro and Swiss franc on Wednesday due to short-covering amid thin trading volume and weaker-than-expected GDP data in Eurozone. Eurozone GDP in the second quarter came out at -0.2%, worse than the expected figure of -0.1% (while yearly figure came out as -4.8%, also worse than forecast of -4.7%). Traders took the weak data as an excuse to square their early short dollar positions (as no major data was due out in the U.S.), the greenback rebounded against euro and franc from Tuesday low of 1.4763 and 1.0237 to as high as 1.4650 and 1.0360 respectively.
The single currency remained firm in Asian and early European sessions as rise in regional equities spurred risk appetite and gave support to risky assets. However, euro retreated from 1.4737 on long liquidation and cross selling in eur/gbp and also in part due to the GDP data (despite the better-than-expected German factory orders which came out as 1.4% versus forecast of 1.2%), price dropped to as low as 1.4650 in U.S. afternoon before recovering.
The British pound was under pressure in Asian session under the effect of weak U.K. industrial production data on Tuesday but trading volume was thin and price traded sideways for the whole day until cross buying against euro emerged in late U.S. session and sterling briefly rose to 1.5972 before retreating.
Dollar-yen fell to an 8-month low of 88.01 in European session due to active cross buying in yen but price rebounded from there strongly to 89.40 on option-defensive buying and Finance Minister Fujii's comments that 'If the yen’s movements become abnormal or disorderly, we will need to consider some action'. However, the pair met renewed selling and retreated in New York afternoon.
Economic data to be released on Wednesday:
Japan current account, economic watcher survey, machine tool orders, Australia unemployment rate, German industrial production, U.K. BoE rate decision, ECB rate decision, U.S. jobless claims, wholesales inventories, Canada housing starts
