Market Review - 09/08/2014 02:02GMT
Dollar falls broadly on profit-taking after Obama ordered air strike in Iraq
Although the greenback climbed initially on Friday against its peers (except vs yen) in Asian morning on news President Obama had authorised target air strike in northern Iraq, a wave of broad-based profit-taking emerged, causing the dollar to retreat and decline accelerated in Europe. The Japanese yen and Swiss franc rallied against U.S. dollar due to renewed risk aversion, however, rebound the Nikkei futures in European morning helped dollar/yen to rebound from 101.51 to 102.08.
The United States launched an air strike against Iraq for the first time since American troops withdrew in 2011. President Obama authorized air strikes after tens of thousands of Christians fled for their lives from Islamic State fighters who have crucified and beheaded captives.
The U.S. Federal Aviation Administration (FAA) restricted U.S. air carriers from flying in Iraqi airspace "due to the hazardous situation created by the armed conflict" currently raging there. Besides, fighting has also resumed in Gaza between Palestinian militants and Israel, while the conflict between Russia and Ukraine remained.
The benchmark U.S. Treasury yield fell to a 14-month low as bond prices rose after the air strike news.The greenback fell to a two-week low of 101.51 against the Japanese yen at European open while U.S. dollar dropped versus Swiss franc to a two-week low of 0.9034 in New York.
The single currency rebounded strongly against U.S. dollar and sterling on talks of active profit-taking together with cross-unwinding in euro. Euro rose to 1.3433 and 0.7998 versus U.S. dollar and sterling respectively. Euro rallied from a fresh 8-month low at 135.73 to 136.88 due the sharp rise in U.S. stock markets. Dow Jones index pared early losses and then rallied by 171 points to 16539 near New York close.
The British pound tumbled to a fresh 7-week low at 1.6767 on active cross selling in sterling. Sterling tumbled against the Japanese yen from 171.91 to 170.71 before recovering.
Next week will see the release of Japan's economic survey, Swiss retails sales and Canada's housing start on Monday.
U.K. BRC retail sales, BOJ meeting minutes, Japan's domestic CGPI, Australia's house prices, NAB business conditions and business confidence, Japan's industrial output, eurozone ZEW economic sentiment, current conditions and economic sentiment, U.S. redbook and Federal Budget on Tuesday.
Japan's GDP, Australia's Westpac consumer confidence, China's retail sales and industrial production, Germany's CPI and HICP, U.K. claimant count unemployment change and ILO unemployment rate, Swiss ZEW investor sentiment, eurozone industrial production, U.S. retail sales and business inventories on Wednesday.
New Zealand's business PMI and retail sales, U.K. RICS housing survey, Australia's westpac leading economic index, China's CB leading economic index, Germany's GDP, Swiss producer and import price, eurozone GDP and inflation, Canada's new house prices, U.S. import prices, exports prices and jobless claims on Thursday.
U.K. GDP, Canada's manufacturing sales, U.S. PPI, NY Fed manufacturing, overall net capital flows, foreign treasury buy, industrial and manufacturing output, capacity utilization and University of Michigan sentiment on Friday.
Dollar falls broadly on profit-taking after Obama ordered air strike in Iraq
Although the greenback climbed initially on Friday against its peers (except vs yen) in Asian morning on news President Obama had authorised target air strike in northern Iraq, a wave of broad-based profit-taking emerged, causing the dollar to retreat and decline accelerated in Europe. The Japanese yen and Swiss franc rallied against U.S. dollar due to renewed risk aversion, however, rebound the Nikkei futures in European morning helped dollar/yen to rebound from 101.51 to 102.08.
The United States launched an air strike against Iraq for the first time since American troops withdrew in 2011. President Obama authorized air strikes after tens of thousands of Christians fled for their lives from Islamic State fighters who have crucified and beheaded captives.
The U.S. Federal Aviation Administration (FAA) restricted U.S. air carriers from flying in Iraqi airspace "due to the hazardous situation created by the armed conflict" currently raging there. Besides, fighting has also resumed in Gaza between Palestinian militants and Israel, while the conflict between Russia and Ukraine remained.
The benchmark U.S. Treasury yield fell to a 14-month low as bond prices rose after the air strike news.The greenback fell to a two-week low of 101.51 against the Japanese yen at European open while U.S. dollar dropped versus Swiss franc to a two-week low of 0.9034 in New York.
The single currency rebounded strongly against U.S. dollar and sterling on talks of active profit-taking together with cross-unwinding in euro. Euro rose to 1.3433 and 0.7998 versus U.S. dollar and sterling respectively. Euro rallied from a fresh 8-month low at 135.73 to 136.88 due the sharp rise in U.S. stock markets. Dow Jones index pared early losses and then rallied by 171 points to 16539 near New York close.
The British pound tumbled to a fresh 7-week low at 1.6767 on active cross selling in sterling. Sterling tumbled against the Japanese yen from 171.91 to 170.71 before recovering.
Next week will see the release of Japan's economic survey, Swiss retails sales and Canada's housing start on Monday.
U.K. BRC retail sales, BOJ meeting minutes, Japan's domestic CGPI, Australia's house prices, NAB business conditions and business confidence, Japan's industrial output, eurozone ZEW economic sentiment, current conditions and economic sentiment, U.S. redbook and Federal Budget on Tuesday.
Japan's GDP, Australia's Westpac consumer confidence, China's retail sales and industrial production, Germany's CPI and HICP, U.K. claimant count unemployment change and ILO unemployment rate, Swiss ZEW investor sentiment, eurozone industrial production, U.S. retail sales and business inventories on Wednesday.
New Zealand's business PMI and retail sales, U.K. RICS housing survey, Australia's westpac leading economic index, China's CB leading economic index, Germany's GDP, Swiss producer and import price, eurozone GDP and inflation, Canada's new house prices, U.S. import prices, exports prices and jobless claims on Thursday.
U.K. GDP, Canada's manufacturing sales, U.S. PPI, NY Fed manufacturing, overall net capital flows, foreign treasury buy, industrial and manufacturing output, capacity utilization and University of Michigan sentiment on Friday.
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