Market Review - 28/07/2014 22:49GMT
Dollar retreats broadly after weak U.S. pending home sales
The greenback weakened against majority of its peers on Monday as investors remained cautious ahead of key U.S. economic data to be released later this week (GDP, non-farm payrolls, FOMC policy decision).
Versus the Japanese yen, although the greenback staged a rebound to session high at 101.91 in early European morning, price pared its gains and retreated to 101.76 in New York morning, weighed down by the release of weaker-than-expected U.S. pending home sales. Later, dollar staged a recovery to 101.87 in New York afternoon before stabilizing.
U.S. pending home sales m/m Jun came in much weaker-than-expected at -1.1% vs forecast of 0.5%.
Despite trading sideways in Asia, the single currency found renewed buying at 1.3427 ahead of European open and gained to 1.3442 in European morning and edged marginally higher to session high at 1.3444 in New York afternoon before stabilizing.
Although the British pound also traded sideways in Asia before finding support at 1.6973 in European morning and rising to an intra-day high at 1.7001 in New York morning. However, cable briefly pared its gains and retreated to 1.6984 at New York midday and continued to remain under pressure.
In other news, IMF said 'UK's monetary policy appropriate for now, might need quick fix adjustment if inflation takes off; sterling's real exchange rate overvalued by about 5-10%; UK economic recovery is becoming more balanced; UK output gap to narrow 1.3% of potential GDP in 2014, to close gradually; UK may need higher interest rates if macroprudential tools don't deal with housing mkt risks; further efforts to bolster capital of UK banks likely to be needed in medium term.'
On the data front, U.S. services PMI came in better-than-expected at 60.9 vs forecast of 59.8.
Data to be released on Tuesday:
Japan unemployment rate, retail sales, Australia HIA home sales, Germany import prices, U.S. Redbook retail sales and consumer confidence.
Dollar retreats broadly after weak U.S. pending home sales
The greenback weakened against majority of its peers on Monday as investors remained cautious ahead of key U.S. economic data to be released later this week (GDP, non-farm payrolls, FOMC policy decision).
Versus the Japanese yen, although the greenback staged a rebound to session high at 101.91 in early European morning, price pared its gains and retreated to 101.76 in New York morning, weighed down by the release of weaker-than-expected U.S. pending home sales. Later, dollar staged a recovery to 101.87 in New York afternoon before stabilizing.
U.S. pending home sales m/m Jun came in much weaker-than-expected at -1.1% vs forecast of 0.5%.
Despite trading sideways in Asia, the single currency found renewed buying at 1.3427 ahead of European open and gained to 1.3442 in European morning and edged marginally higher to session high at 1.3444 in New York afternoon before stabilizing.
Although the British pound also traded sideways in Asia before finding support at 1.6973 in European morning and rising to an intra-day high at 1.7001 in New York morning. However, cable briefly pared its gains and retreated to 1.6984 at New York midday and continued to remain under pressure.
In other news, IMF said 'UK's monetary policy appropriate for now, might need quick fix adjustment if inflation takes off; sterling's real exchange rate overvalued by about 5-10%; UK economic recovery is becoming more balanced; UK output gap to narrow 1.3% of potential GDP in 2014, to close gradually; UK may need higher interest rates if macroprudential tools don't deal with housing mkt risks; further efforts to bolster capital of UK banks likely to be needed in medium term.'
On the data front, U.S. services PMI came in better-than-expected at 60.9 vs forecast of 59.8.
Data to be released on Tuesday:
Japan unemployment rate, retail sales, Australia HIA home sales, Germany import prices, U.S. Redbook retail sales and consumer confidence.
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