Euro falls to fresh near one-year trough of 1.3132: Sept 1, 2014

Market Review - 30/08/2014 00:57GMT

Euro falls to fresh near one-year trough of 1.3132

The single currency briefly rebounded to 1.3196 on short-covering after the release of eurozone inflation data which came in as expected at 0.3%, however, continued tensions in Ukraine knocked price lower and euro dropped to a fresh near 1-year low at 1.3132 near New York close on speculation that ECB will cut interest rate next week.

Ukrainian military said 'Putin's call for creation of a corridor for Ukrainian troops in eastern Ukraine shows that separatists are led and controlled directly from the Kremlin.' Russia's Putin said 'Ukrainian assault on eastern cities reminiscent of Nazi siege of Leningrad in word war 2; problem is refusal of Ukrainian authorities to enter substantive negotiations with separatists; Russians n Ukrainians are practically one people.'

Although dollar yen traded with a soft bias at Tokyo open, intra-day rebound in the Nikkei lifted the pair and price ratcheted higher in New York session due partly to broad-based strength in the greenback, the pair closed near the day's high of 104.12.

Despite cable's brief rebound to 1.6613 in tandem with euro, the British pound retreated to 1.6564 in late New York but only to rise again above 1.6600 near New York close.

Earlier in the day, ECB's Nowotny said 'shares concerns about inflation, unemployment in Europe; banks that don't use ECB's TLTRO long-term loans making big mistake.'

Next week will see the release of New Zealand trade data, Japan's Capex, Australia's inflation gauge, China's NBS manufacturing PMI, Japan's manufacturing PMI, China's final HSBC manufacturing PMI, Germany's detailed GDP, Swiss PMI, German, eurozone and U.K. manufacturing PMI on Monday. U.S. market will be closed for Labor Day holiday.

Australia's building approvals, current account RBA's interest rate decision and policy statement, Swiss GDP, U.K. Markit construction PMI, eurozone producer prices, U.S. construction spending and ISM manufacturing PMI on Tuesday.

U.K. BRC shop price index, China's NBS non-manufacturing PMI, Australia's GDP, China's HSBC services PMI, German and eurozone and U.K. Markit services PMI, eurozone retail sales, U.S. Redbook, ISM-New York index, Canada's rate decision, U.S. factory orders, durable goods and Fed's Beige book on Wednesday.

Australia's exports, imports, trade balance and retail sales, Germany's industrial orders, Bank of England's rate decision, ECB's rate decision, U.S. ADP employment, ECB's press conference, U.S. initial jobless claims, productivity and international trade, Canada's exports, imports and trade balance, U.S. Markit services PMI, ISM non-manufacturing PMI on Thursday.

U.K. RICS housing price balance, Bank of Japan monthly economy servery and leading indicator, Germany's industrial output, Swiss CPI and industrial orders, eurozone revised GDP, U.S. non-farm payrolls, private payrolls and unemployment rate, Canada's employment change, unemployment rate, and Ivey PMI on Friday.