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Market Review - 13/10/2009 21:00 All times in GMT
Euro rises to 14-month high on dollar's broad-based weakness
Euro advanced to another fresh 2009 high of 1.4876, also the highest level since the bankruptcy of Lehman Brothers in 2008, undermining dollar's safe-haven appeal during financial crisis. The greenback fell broadly as hopes of recovery spurred buying in high-yielding currencies, aussie dollar and loonie reached fresh 2009 year high of 0.9127 and 1.0265 respectively while gold reached another record high of $1,068.30 an ounce on expectation that the weakening dollar and faster inflation will increase the demand of precious metals.
The single currency traded sideways in Asia but rose sharply in European morning on dollar's broad-based weakness and reached intra-day high of 1.4876, despite the weaker-than-expected ZEW data in eurozone (which came out as 56.9, lower than forecast figure 61.2) and Germany (actual figure 56.0, lower than forecast of 58.3). Price retreated from there to 1.4799 on profit taking and traded sideways in late U.S. session (U.S. stock markets traded narrowly and ended down 14 points).
Despite intra-day selloff to a 4-1/2 month low at 1.5708 (lowest since May 21) in European morning, cable rallied from there to 1.5853 on short-covering and also in line with dollar's broad-based weakness. Sterling extended gain in U.S. session to as high as 1.5940 after Bank of England Deputy Governor Charles Bean said asset purchases may be working, he also said that
'economic activity here and elsewhere has probably troughed and policy makers need gradually to remove the large monetary stimulus'.
Economic data to be released on Wednesday:
Japan domestic CGPI, consumer confidence, BoJ rate decision, U.K. claimant count, ILO unemployment rate, average earnings, eurozone industrial production, U.S. retail sales, business inventories, FOMC minutes.
Euro rises to 14-month high on dollar's broad-based weakness
Euro advanced to another fresh 2009 high of 1.4876, also the highest level since the bankruptcy of Lehman Brothers in 2008, undermining dollar's safe-haven appeal during financial crisis. The greenback fell broadly as hopes of recovery spurred buying in high-yielding currencies, aussie dollar and loonie reached fresh 2009 year high of 0.9127 and 1.0265 respectively while gold reached another record high of $1,068.30 an ounce on expectation that the weakening dollar and faster inflation will increase the demand of precious metals.
The single currency traded sideways in Asia but rose sharply in European morning on dollar's broad-based weakness and reached intra-day high of 1.4876, despite the weaker-than-expected ZEW data in eurozone (which came out as 56.9, lower than forecast figure 61.2) and Germany (actual figure 56.0, lower than forecast of 58.3). Price retreated from there to 1.4799 on profit taking and traded sideways in late U.S. session (U.S. stock markets traded narrowly and ended down 14 points).
Despite intra-day selloff to a 4-1/2 month low at 1.5708 (lowest since May 21) in European morning, cable rallied from there to 1.5853 on short-covering and also in line with dollar's broad-based weakness. Sterling extended gain in U.S. session to as high as 1.5940 after Bank of England Deputy Governor Charles Bean said asset purchases may be working, he also said that
'economic activity here and elsewhere has probably troughed and policy makers need gradually to remove the large monetary stimulus'.
Economic data to be released on Wednesday:
Japan domestic CGPI, consumer confidence, BoJ rate decision, U.K. claimant count, ILO unemployment rate, average earnings, eurozone industrial production, U.S. retail sales, business inventories, FOMC minutes.
