Market Review - 20/09/2014 00:23GMT
U.S. dollar rises broadly against major currencies on Friday
The greenback rallied to a fresh 6-year peak of 109.46 shortly after Tokyo open on Friday on the rally in the Nikkei-225 index (closed up by 254 points at 16321) as Japan's PM Abe said aims to carry out GPIF reform as soon as possible. Abe said needs to watch carefully economic conditions in Jul-Sep to decide on whether to raise sales tax again.
BoJ Governor Kuroda said 'don't see any big problem with current FX moves; key is for FX move stably reflecting econ fundamentals; won't comment on specific FX levels, pace of moves, when asked about dollar's rise towards 110 yen; Japan making steady progress in meeting price target but only half way through; there has been big focus ib FX market on monetart policy divergence in U.S., Japan, Europe.
Despite euro's brief but strong rebound from Thursday's low at 1.2834 to 1.2929, the single currency ratcheted lower after meeting renewed selling at 1.2929 and the pair penetrated 1.2834 support and weakened to a fresh 14-month low at 1.2831 in New York morning on dollar's broad-based strength.
ECB's Praet said 'governments should consider guarantees for ABS; ABS purchase programme will help improve banks' leverage ratio; euro exchange rate in line with fundamentals; ECB does not have an exchange rate target.'
The British pound is the big currency mover in the market on Friday. The British pound rallied initially to as high as 1.6525 in Asian morning due to raising expectation of a 'No' vote in the Scottish referendum, however, profit-taking quickly emerged after 'No' won in the Scottish referendum. Scotland voted to remain in the UK by 55% to 45%. Cable later tumbled to as low as 1.6298 in New York.
Britain's PM Cameron said 'Scottish rejection of independence "a clear result"; promises will grant new powers to England, Wales and N.Ireland too; wants 'balanced' constitutional settlement for entire britain after Scottish 'No' vote; it was right to give Scots their say; the debate has been settled for a generation; there is now a "great opportunity" to change way Britain is governed; promises to give Scotland more powers "in next parliament"; draft laws to give Scotland more powers to be published by January.'
Week ahead will see the release of Italy's industrial orders and sales, U.S. existing home sales and eurozone consumer confidence on Monday;
China's HSBC manufacturing PMI, German and eurozone Markit service PMI, U.K. PSNB and PSNCR, Canada's retail sales, U.S. Redbook and Markit manufacturing PMI on Tuesday;
New Zealand's exports, imports and trade balance, Japan's Markit manufacturing PMI, Swiss ubs consumption indicator, German Ifo business climate, current conditions and expectations, U.S. new home sales on Wednesday;
U.K. CBI distributive trades, U.S. building permits, durable goods and Markit services PMI on Thursday;
Japan's CPI Germany's Gfk consumer sentiment, France's consumer confidence, U.S. core PCE, GDP in Q2, University of Michigan sentiment on Friday.
U.S. dollar rises broadly against major currencies on Friday
The greenback rallied to a fresh 6-year peak of 109.46 shortly after Tokyo open on Friday on the rally in the Nikkei-225 index (closed up by 254 points at 16321) as Japan's PM Abe said aims to carry out GPIF reform as soon as possible. Abe said needs to watch carefully economic conditions in Jul-Sep to decide on whether to raise sales tax again.
BoJ Governor Kuroda said 'don't see any big problem with current FX moves; key is for FX move stably reflecting econ fundamentals; won't comment on specific FX levels, pace of moves, when asked about dollar's rise towards 110 yen; Japan making steady progress in meeting price target but only half way through; there has been big focus ib FX market on monetart policy divergence in U.S., Japan, Europe.
Despite euro's brief but strong rebound from Thursday's low at 1.2834 to 1.2929, the single currency ratcheted lower after meeting renewed selling at 1.2929 and the pair penetrated 1.2834 support and weakened to a fresh 14-month low at 1.2831 in New York morning on dollar's broad-based strength.
ECB's Praet said 'governments should consider guarantees for ABS; ABS purchase programme will help improve banks' leverage ratio; euro exchange rate in line with fundamentals; ECB does not have an exchange rate target.'
The British pound is the big currency mover in the market on Friday. The British pound rallied initially to as high as 1.6525 in Asian morning due to raising expectation of a 'No' vote in the Scottish referendum, however, profit-taking quickly emerged after 'No' won in the Scottish referendum. Scotland voted to remain in the UK by 55% to 45%. Cable later tumbled to as low as 1.6298 in New York.
Britain's PM Cameron said 'Scottish rejection of independence "a clear result"; promises will grant new powers to England, Wales and N.Ireland too; wants 'balanced' constitutional settlement for entire britain after Scottish 'No' vote; it was right to give Scots their say; the debate has been settled for a generation; there is now a "great opportunity" to change way Britain is governed; promises to give Scotland more powers "in next parliament"; draft laws to give Scotland more powers to be published by January.'
Week ahead will see the release of Italy's industrial orders and sales, U.S. existing home sales and eurozone consumer confidence on Monday;
China's HSBC manufacturing PMI, German and eurozone Markit service PMI, U.K. PSNB and PSNCR, Canada's retail sales, U.S. Redbook and Markit manufacturing PMI on Tuesday;
New Zealand's exports, imports and trade balance, Japan's Markit manufacturing PMI, Swiss ubs consumption indicator, German Ifo business climate, current conditions and expectations, U.S. new home sales on Wednesday;
U.K. CBI distributive trades, U.S. building permits, durable goods and Markit services PMI on Thursday;
Japan's CPI Germany's Gfk consumer sentiment, France's consumer confidence, U.S. core PCE, GDP in Q2, University of Michigan sentiment on Friday.
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