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Market Review - 16/10/2009 20:38 All times in GMT
Dollar rebounds against high-yielding currencies on weekend short-covering
The greenback rebounded against high-yielding currencies like euro, aussie and kiwi from fresh year lows (1.4968, 0.9271 and 0.7496 respectively) due to short-covering and falling equities. The earnings report for Bank of America turned out to be weaker than expected (a loss of $1 billion was reported for Q3 compared to a net profit of $1.18 billion in the same period last year) and reduced risk-appetite, Dow Jones Industrial index failed to maintain a foothold above the 10,000 level and closed down 67 points to 9995.
Earlier in Asian session, the single currency initially extended Thursday's rise from 1.4843 to another fresh 2009 high of 1.4968 (only one tick above Thursday's high) amid thin trading volume and then retreated from there on long liquidation ahead of the weekend and also dollar's broad-based rebound. However, price was able to hold above 1.4843 support and staged a recovery in U.S. afternoon. Jean-Claude Juncker, the Prime Minister of Luxembourg said euro's gain against the dollar will be discussed at a meeting of euro-area finance ministers in Luxembourg next Monday 19th October, he added 'we don’t like excessive volatility in exchange rates and disorderly movements.'
The British pound continued previous day's rally and climbed to 1.6401 at Asian opening after Bank of England Markets Director Paul Fisher's comments on Thursday (he said policy makers would be more likely to suspend asset purchases, giving themselves the option of 'doing more later'). Despite cable's retreat in European morning on dollar's intra-day rebound, cross buying against euro gave support to sterling (eur/gbp extended weekly decline from 0.9413 to 0.9094) and price rebounded from 1.6253 and then traded sideways for the rest of the day under thin market condition (no major economic data was out in U.K.).
Economic data to be released next week are:
Rightmove house prices in U.K.;BOJ minutes, tertiary industry index in Japan; NAHB housing market index on Monday; PPI in Germany; PSNCR in U.K; building permits, housing starts, PPI and PCE in U.S.; leading indicators and BOC rate decision on Tuesday; Westpac leading economic index in Australia, CBI industrial trend in U.K. on Wednesday; export, import, trade balance in Japan, trade balance in Switzerland, current account in eurozone, retail sales in U.K.; jobless claims and leading indicator in U.S.; retail sales and ex. autos in Canada on Thursday; export and import in Australia; CGP in U.K.; existing home sales in U.S. on Friday.
Dollar rebounds against high-yielding currencies on weekend short-covering
The greenback rebounded against high-yielding currencies like euro, aussie and kiwi from fresh year lows (1.4968, 0.9271 and 0.7496 respectively) due to short-covering and falling equities. The earnings report for Bank of America turned out to be weaker than expected (a loss of $1 billion was reported for Q3 compared to a net profit of $1.18 billion in the same period last year) and reduced risk-appetite, Dow Jones Industrial index failed to maintain a foothold above the 10,000 level and closed down 67 points to 9995.
Earlier in Asian session, the single currency initially extended Thursday's rise from 1.4843 to another fresh 2009 high of 1.4968 (only one tick above Thursday's high) amid thin trading volume and then retreated from there on long liquidation ahead of the weekend and also dollar's broad-based rebound. However, price was able to hold above 1.4843 support and staged a recovery in U.S. afternoon. Jean-Claude Juncker, the Prime Minister of Luxembourg said euro's gain against the dollar will be discussed at a meeting of euro-area finance ministers in Luxembourg next Monday 19th October, he added 'we don’t like excessive volatility in exchange rates and disorderly movements.'
The British pound continued previous day's rally and climbed to 1.6401 at Asian opening after Bank of England Markets Director Paul Fisher's comments on Thursday (he said policy makers would be more likely to suspend asset purchases, giving themselves the option of 'doing more later'). Despite cable's retreat in European morning on dollar's intra-day rebound, cross buying against euro gave support to sterling (eur/gbp extended weekly decline from 0.9413 to 0.9094) and price rebounded from 1.6253 and then traded sideways for the rest of the day under thin market condition (no major economic data was out in U.K.).
Economic data to be released next week are:
Rightmove house prices in U.K.;BOJ minutes, tertiary industry index in Japan; NAHB housing market index on Monday; PPI in Germany; PSNCR in U.K; building permits, housing starts, PPI and PCE in U.S.; leading indicators and BOC rate decision on Tuesday; Westpac leading economic index in Australia, CBI industrial trend in U.K. on Wednesday; export, import, trade balance in Japan, trade balance in Switzerland, current account in eurozone, retail sales in U.K.; jobless claims and leading indicator in U.S.; retail sales and ex. autos in Canada on Thursday; export and import in Australia; CGP in U.K.; existing home sales in U.S. on Friday.
