Dollar rallies broadly in thin New York session Friday: May 4, 2015

Market Review - 02/05/2015 07:54GMT 
 
Dollar rallies broadly in thin New York session Friday

The greenback rallied across the board on Friday in New York trading on short covering in the U.S. dollardue release of a slew of soft U.S. economic data.

U.S. manufacturing PMI came in at 54.1 n U. of Michigan consumer sentiment was reported at 94.9.

Versus the Japanese yen, the greenback gained strongly at Asian open and continued to ratchet higher through out Asian and European sessions. Intra-day ascent accelerated in New York morning after the release of U.S. data and rose to an intra-day high at 120.29 before stabilising in New York afternoon.

Although the single currency traded sideways in Asia and rose to 1.1285 in European morning, then to session high at 1.1290 in New York morning, price pared its gains and tumbled to an intra-day low at 1.1175 on dollar's broad-based strength.

Despite trading sideways in Asia and edging up to session high at 1.5397 in European morning, the British pound tumbled after the release of much-weaker-than-expected UK manufacturing PMI. Cable continued to ratchet lower in New York morning and hit an intra-day low at 1.1176 before staging a recovery in New York afternoon.

UK manufacturing PMI came in at 51.9 vs forecast of 54.6.

In other news, Fed's Mester said 'more work needed on nexus of financial stability, monetary policy; Fed must quantify effects of households on macroeconomy in order to achieve monetary goals; Fed needs to better understand how to adjust policy based on financial system risks; improved household finance a key to forecast for economic expansion, inflation n labor improvements.'

Data to be released this week:

Japan market holiday, Australia building approvals, China manufacturing PMI, Swiss manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, UK market holiday, EU manufacturing PMI, sentix index, U.S. factory orders and durable goods on Monday.

Australia new home sales, exports, imports, trade balance, RBA rate decision, France budget balance, UK construction PMI, EU producer prices, Canada imports, exports, trade balance, U.S. trade balance, redbook retail sales, ISM non-manufacturing and services PMI on Tuesday.

New Zealand labour cost, unemployment rate, Japan market holiday, Australia retail sales, China services PMI, Italy services PMI, France services PMI, Germany services PMI, EU services PMI, retail sales, UK services PMI, Canada Ivey PMI and U.S. ADP employment on Wednesday.

Australia unemployment, Japan services PMI, Germany factory orders, France exports, imports, trade balance, U.S. jobless claims and Canada building permits on Thursday.

Japan BoJ meeting minutes, Australia RBA monetary policy statement, China exports, imports, trade balance, Swiss unemployment rate, Germany industrial production, exports, imports, trade balance, current account, Italy industrial output and UK trade balance on Friday.