Market Review - 12/10/2015 17:01 All times in GMT
U.S. dollar remains lower in subdued trade on Monday
The greenback was broadly lower versus the other major currencies in subdued trade on Monday, as declining expectations for a U.S. rate hike before the end of the year after FOMC minutes last Thursday continued to weigh on demand for the usd.
During the day, the single currency moved sideways in Asia before briefly dropped to 1.1360 in European morning, however, renewed buying interest emerged there and then lifted price to a fresh 3-week peak at 1.1397 before retreating to 1.1364. later, eur/usd pair moved sideways inside 1.1364-1.1357 in 'holiday-thinned' North American session.
On the data front, Bank of France said Monday that France's current account moved to a surplus of 200 million euros in August from a 400 million euros deficit in the previous month.
Versus the Japanese yen, dollar edged lower after staging a bounce from 120.09 to 120.22 in Asia and price later fell to a fresh session low of 119.90 in quiet North American session due to active cross-buying in yen versus other major currencies.
The British pound started to edge higher versus the greenback after finding support at 1.5309 ahead of Asian open. Cable later climbed to 1.5367 and then 1.5373 before selling interest below last Friday's 2-1/2 week peak at 1.5382 knocked price down to 1.5335 in quiet North American session.
In other news, Atlanta Fed President and CEO Dennis Lockhart said on Monday, 'slowdown in Chinese economy unlikely to have direct effect on U.S. economy, but Europe more exposed and that could have indirect effect on U.S.; October or December likely appropriate for rate hike, but still data-dependent; very unlikely Fed's target inflation of 2 percent is going to change; "potential" that there is enough data for October FOMC meeting rate hike, but lot more in December; comforted by reduction in recent measured volatility in financial markets, but still uncertainties there to take into consideration; more than 100,000 jobs per month sufficient to push unemployment rate down; FOMC data-dependent approach is "sound" with few alternatives.'
Chicago Fed President Charles Evans said on Monday, 'biggest risk to U.S. economy is state of global growth as china decelerates; Fed has made great strides on labor market front, have met goals there; as cycle of economy continues to improve I would expect manufacturing to benefit; oil prices down not just because of weak demand but also because of increased supply; lower oil prices can benefit consumers, but it also means lower business investment.' Later, he added, 'mid-2016 is best choice for rate hike, but there is some "wiggle room" on timing; way too early to prejudge vote on possible rate hike in December, or even October; optimistic that labor productivity is higher, should be seeing stronger wage growth; not seeing any unusual or outsize financial stability risks; when ultimately make adjustments to balance sheet, it will be a positive sign for economy; no rush to make adjustments to balance sheet.'
Data to be release on Tuesday:
Australia NAB business conditions, NAB business confidence, China trade reports, Japan consumer confidence, Germany CPI, HICP and ZEW reports, Switzerland producer/import price, U.K. BRC retail sales, CPI, PPI and RPI, U.S. Redbook and Fed budget.
U.S. dollar remains lower in subdued trade on Monday
The greenback was broadly lower versus the other major currencies in subdued trade on Monday, as declining expectations for a U.S. rate hike before the end of the year after FOMC minutes last Thursday continued to weigh on demand for the usd.
During the day, the single currency moved sideways in Asia before briefly dropped to 1.1360 in European morning, however, renewed buying interest emerged there and then lifted price to a fresh 3-week peak at 1.1397 before retreating to 1.1364. later, eur/usd pair moved sideways inside 1.1364-1.1357 in 'holiday-thinned' North American session.
On the data front, Bank of France said Monday that France's current account moved to a surplus of 200 million euros in August from a 400 million euros deficit in the previous month.
Versus the Japanese yen, dollar edged lower after staging a bounce from 120.09 to 120.22 in Asia and price later fell to a fresh session low of 119.90 in quiet North American session due to active cross-buying in yen versus other major currencies.
The British pound started to edge higher versus the greenback after finding support at 1.5309 ahead of Asian open. Cable later climbed to 1.5367 and then 1.5373 before selling interest below last Friday's 2-1/2 week peak at 1.5382 knocked price down to 1.5335 in quiet North American session.
In other news, Atlanta Fed President and CEO Dennis Lockhart said on Monday, 'slowdown in Chinese economy unlikely to have direct effect on U.S. economy, but Europe more exposed and that could have indirect effect on U.S.; October or December likely appropriate for rate hike, but still data-dependent; very unlikely Fed's target inflation of 2 percent is going to change; "potential" that there is enough data for October FOMC meeting rate hike, but lot more in December; comforted by reduction in recent measured volatility in financial markets, but still uncertainties there to take into consideration; more than 100,000 jobs per month sufficient to push unemployment rate down; FOMC data-dependent approach is "sound" with few alternatives.'
Chicago Fed President Charles Evans said on Monday, 'biggest risk to U.S. economy is state of global growth as china decelerates; Fed has made great strides on labor market front, have met goals there; as cycle of economy continues to improve I would expect manufacturing to benefit; oil prices down not just because of weak demand but also because of increased supply; lower oil prices can benefit consumers, but it also means lower business investment.' Later, he added, 'mid-2016 is best choice for rate hike, but there is some "wiggle room" on timing; way too early to prejudge vote on possible rate hike in December, or even October; optimistic that labor productivity is higher, should be seeing stronger wage growth; not seeing any unusual or outsize financial stability risks; when ultimately make adjustments to balance sheet, it will be a positive sign for economy; no rush to make adjustments to balance sheet.'
Data to be release on Tuesday:
Australia NAB business conditions, NAB business confidence, China trade reports, Japan consumer confidence, Germany CPI, HICP and ZEW reports, Switzerland producer/import price, U.K. BRC retail sales, CPI, PPI and RPI, U.S. Redbook and Fed budget.
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