U.S. dollar falls broadly on profit taking despite upbeat U.S. retail sales data: Nov 17, 2014

Market Review - 15/11/2014 00:59GMT

U.S. dollar falls broadly on profit taking despite upbeat U.S. retail sales data

Although the single currency briefly dropped to 1.2399 in New York morning after the release of stronger-than-expected U.S. retail sales and University. of Michigan sentiment data, active profit-taking and short-covering lifted the pair to as high as 1.2546 in thin U.S. session.

U.S. retail sales and retail sales ex-auto both came in at 0.3%, slightly better than market expectation of 0.2%. U.S. University of Michigan consumer sentiment came in better-than-expected at 89.4 versus forecast of 87.5.

EZ GDP qq n yy came in slightly better-than-expected at 0.2% and 0.8% versus forecasts of 0.1% and 0.7% respectively.

The greenback also rallied to a fresh 7-year high at 116.82 against the Japanese in New York morning after the release of stronger-than-expected U.S. retail sales and U. of Michigan. sentiment, however, profit-taking capped dollar's upside and the pair subsequently retreated to 116.05 before recovering.

Japan EconMin Amari said 'if gov't delays next year's sales tax increase, gov't wud work to get wages to rise faster; if gov't delays sales tax increase, wud need steps to prevent sell-off in Japanese mkts.'

IMF official said 'aggressive pace of BoJ's monetary easing may need to be maintained for an extended period; BoJ's unexpected easing on Oct. 31 is welcome and appropriate, should now be accompanied by govt reforms; raising sales tax rate to 10 pct in oct 2015 is necessary to bring down Japan's fiscal deficit in a steady durable manner; consideration should be given to temporary, targeted fiscal stimulus if gdp growth turns out to be below expectations due to april tax hike.'

The British pound also tumbled to a fresh 14-month low of 1.5593 in New York morning due to the release of strong U.S. economic data, however, cable later rebounded strongly to 1.5695 in late New York due to active short-covering.

This week will see the release of the following economic data:

New Zealand retail sales, Japan's GDP, U.K. Rightmove house price, EU eurostat trade, U.S. New York Empire state manufacutring, ECB Draghi's speech, U. S. industrial production on Monday;

Australia's CB leading indicator, Westpac leading index and RBA meeting minutes, China house prices, U.K. CPI, PPI and RPI, Germany's ZEW economic sentiment, U.S. PPI, Redbook, NAHB housing market index, net L-T flows, overall net capital flows and foreign buys on Tuesday;

BoJ interest rate decision, EU current account, BoE MPC Vote outcome, Swiss ZEW investor sentiment, U.S. building permits, housing starts, FOMC minutes on Wednesday;

Japan's export, imports, trade balance and manufacturing PMI, China HSBC manufacturing PMI, BoJ monthly economic survey, Germany's producer prices ad Markit service PMI, EU Markit PMI, U.K. retail sales, CBI trade, Canada's wholesale trade, U.S. CPI, Markit manufacturing PMI, Philly Fed business index, existing home sales, leading index change and consumer confidence on Thursday;

U.K. PSNCR and Canada CPI on Friday.