Dollar swings wildly in volatile New York session: Aug 3, 2015

Market Review - 01/08/2015 01:08GMT 
 
Dollar swings wildly in volatile New York session

U.S. dollar tanked broadly versus its majors peers on Friday after a surprise sharp drop in U.S. employment cost index, however, active profit-taking ahead of the weekend together with hawkish comment by St. Louis Federal Reserve President James Bullard helped dollar to pare almost all its intra-day losses vs its major peers and price ended the day flat.

U.S. labor costs in the 2nd quarter recorded their smallest increase in 33 years amid tepid gains in the private sector, but it likely was a temporary setback against the backdrop of diminishing labor market slack. The Employment Cost Index (ECI), the broadest measure of labor costs, edged up 0.2%, the Labor Department said on Friday. That was the smallest gain since the series started in the 2nd quarter of 1982 and followed an unrevised 0.7% increase in the 1st quarter.

The single currency rallied to as high as 1.1114 on the surprisingly poor U.S. wage growth, however, euro quickly erased most of the gains and retreated strongly to 1.0965 near New York close.

Greek central bank official said target is to recapitalise Greek banks by the end of 2015; priority is to avoid bail-in on deposits at Greek banks; most likely scenario is recapitalisation through a bail-out fund for banks.

Greek stock market spokeswoman said all shares will be traded on Monday, including banking stocks; volatility limits to stay at 30 pct (not to be lowered); there will be no restrictions on trade by foreign investors.

The British pound went through a roller coaster session on Friday as despite initial rebound to 1.5616 ahead of European open, price fell to session low at 1.5549 in European morning on cross-selling of sterling versus euro. However, cable pared its losses and rallied to an intra-day high at 1.5679 at New York open on dollar's broad-based strength on poor U.S. employment cost data before falling again to 1.5597.

This week will see the release of Australia's HIA new home sales, Japan's manufacturing PMI, U.K. Nationwide house prices, Swiss manufacturing PMI, Germany's, eurozone and U.K. Markit manufacturing PMI respectively, U.S. PCE price index, construction spending and ISM manufacturing PMI on Monday.

Australia's retail sales, trade balance, RBA rate decision and policy statement, U.K. Markit construction PMI, eurozone producer prices, U.S. Redbook, Canada's RBC manufacturnig PMI, U.S. ISM, durable goods and factory orders on Tuesday.

New Zealand's HLFS unemployment rate and labour cost index, China's Caixin services PMI, Swiss CPI, Germany's, eurozone and U.K. Markit services PMI respectively, eurozone retail sales, U.S. ADP National employment, Canada's exports, imports and trade balance, U.S. ISM non-manufacturing PMI on Wednesday.

Australia's unemployment rate, Japan's leading indicator, Swiss consumer confidence, Germany's industrial orders, U.K. industrial and manufacturing output, BOE MPC vote outcome and rate decision on Thursday.

Australia's housing finance, Swiss unemployment rate, Germany's exports, imports, trade balance and industrial output, U.K. goods trade balance, Canada's unemployment rate, building permits, employment change and Ivey PMI, U.S. average earnings, non-farm payrolls and unemployment rate on Friday.