Market Review - 24/11/2015 18:38GMT
U.S. dollar trims losses after upbeat U.S. GDP data
The greenback pared losses against other major currencies in New York session on Tuesday as data showed that the U.S. economy grew more than initially estimated in the third quarter and added to expectations that the Federal Reserve is on track to raise interest rates next month. However, gains were held in check after the release of downbeat U.S. consumer confidence later in the session.
Versus the Japanese yen, U.S. dollar came under renewed selling pressure after meeting selling interest at 122.96 at Asian open and the ratcheted lower to 120.40 in European morning. Price later recovered to 122.66 but only to fall to a fresh session low of 122.36 swiftly after the release of U.S. GDP data before staging another bounce to 122.64. Having said that, the pair remained under pressure in New York afternoon session due to active cross-buying in yen versus sterling and euro.
On Tuesday, the U.S. Commerce Department reported that U.S.'s GDP grew at an annual rate of 2.1% in the three months to September, in line with expectations. Separately, preliminary data initially pegged U.S. growth at 1.5% in the third quarter.
Later, the U.S. Conference Board said its index of consumer confidence sank to a 12-month low of 90.4 this month from a reading of 99.1 in October, whose figure was revised from a previously reported 97.6. Analysts expected the index to rise to 99.5 in November.
The single currency found support versus the greenback after retreating from 1.0645 to 1.0620 in Asia and then briefly rose to 1.0670 in European morning due to upbeat Germany's Ifo reports. Later, although the pair retreated to 1.0635 and then ratcheted higher to a fresh session high of 1.0673 in New York morning, gains were held in check after release of upbeat U.S. GDP data and the pair fell back to 1.0628 before moving sideways.
The German research institute, Ifo said its Business Climate Index rose to a seasonally adjusted 109.0 this month from a reading of 108.2 in October, beating forecasts for 108.2. In addition, the Current Assessment Index increased to 113.4 in November from 112.7 a month earlier, whilst the Business Expectations Index, which measures attitudes toward business prospects over the next six months, rose to 104.7 this month from 103.9 in October.
Elsewhere, the British pound tumbled against the U.S. dollar on Tuesday after the head of the Bank of England said UK interest rates were likely to stay low for "some time". During the day, although cable edged higher from previous session low of 1.5109 in Asia and rose to 1.5156 in European morning, price came under renewed selling pressure there and later fell to as low as 1.5053 in New York session after dovish comments from BoE's governor Mark Carney before recovering.
Reuters news reported. Speaking alongside other BoE monetary policy committee (MPC) members to lawmakers in Britain's parliament, Governor Mark Carney said although there would be no need for negative interest rates such as those in place in the euro zone, the British economy was in a "prolonged interest rate environment".
Carney also said that while the bank tended to look through falls in energy prices, the implications of the pound's recent appreciation were "more complicated" -- on a trade-weighted basis, sterling is close 7-1/2-year highs.
Separately, fellow MPC member and BoE Chief Economist Andy Haldane said on Tuesday he saw the risks to the UK economy and inflation as "skewed materially to the downside, more so than embodied in the November 2015 Inflation Report".
Data to be released on Wednesday:
Australia's construction work done, Swiss consumption indicator, France consumer confidence, Italy industrial order, industrial sales, retail sales, U.S. mortgage rate, mortgage market index, purchase index, mortgage refinance index, initial jobless claims, build permits, consumption, core PCE prices, durable goods orders, PCE prices, personal consumption, personal income, home price, home sales
U.S. dollar trims losses after upbeat U.S. GDP data
The greenback pared losses against other major currencies in New York session on Tuesday as data showed that the U.S. economy grew more than initially estimated in the third quarter and added to expectations that the Federal Reserve is on track to raise interest rates next month. However, gains were held in check after the release of downbeat U.S. consumer confidence later in the session.
Versus the Japanese yen, U.S. dollar came under renewed selling pressure after meeting selling interest at 122.96 at Asian open and the ratcheted lower to 120.40 in European morning. Price later recovered to 122.66 but only to fall to a fresh session low of 122.36 swiftly after the release of U.S. GDP data before staging another bounce to 122.64. Having said that, the pair remained under pressure in New York afternoon session due to active cross-buying in yen versus sterling and euro.
On Tuesday, the U.S. Commerce Department reported that U.S.'s GDP grew at an annual rate of 2.1% in the three months to September, in line with expectations. Separately, preliminary data initially pegged U.S. growth at 1.5% in the third quarter.
Later, the U.S. Conference Board said its index of consumer confidence sank to a 12-month low of 90.4 this month from a reading of 99.1 in October, whose figure was revised from a previously reported 97.6. Analysts expected the index to rise to 99.5 in November.
The single currency found support versus the greenback after retreating from 1.0645 to 1.0620 in Asia and then briefly rose to 1.0670 in European morning due to upbeat Germany's Ifo reports. Later, although the pair retreated to 1.0635 and then ratcheted higher to a fresh session high of 1.0673 in New York morning, gains were held in check after release of upbeat U.S. GDP data and the pair fell back to 1.0628 before moving sideways.
The German research institute, Ifo said its Business Climate Index rose to a seasonally adjusted 109.0 this month from a reading of 108.2 in October, beating forecasts for 108.2. In addition, the Current Assessment Index increased to 113.4 in November from 112.7 a month earlier, whilst the Business Expectations Index, which measures attitudes toward business prospects over the next six months, rose to 104.7 this month from 103.9 in October.
Elsewhere, the British pound tumbled against the U.S. dollar on Tuesday after the head of the Bank of England said UK interest rates were likely to stay low for "some time". During the day, although cable edged higher from previous session low of 1.5109 in Asia and rose to 1.5156 in European morning, price came under renewed selling pressure there and later fell to as low as 1.5053 in New York session after dovish comments from BoE's governor Mark Carney before recovering.
Reuters news reported. Speaking alongside other BoE monetary policy committee (MPC) members to lawmakers in Britain's parliament, Governor Mark Carney said although there would be no need for negative interest rates such as those in place in the euro zone, the British economy was in a "prolonged interest rate environment".
Carney also said that while the bank tended to look through falls in energy prices, the implications of the pound's recent appreciation were "more complicated" -- on a trade-weighted basis, sterling is close 7-1/2-year highs.
Separately, fellow MPC member and BoE Chief Economist Andy Haldane said on Tuesday he saw the risks to the UK economy and inflation as "skewed materially to the downside, more so than embodied in the November 2015 Inflation Report".
Data to be released on Wednesday:
Australia's construction work done, Swiss consumption indicator, France consumer confidence, Italy industrial order, industrial sales, retail sales, U.S. mortgage rate, mortgage market index, purchase index, mortgage refinance index, initial jobless claims, build permits, consumption, core PCE prices, durable goods orders, PCE prices, personal consumption, personal income, home price, home sales
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