Market Review - 10/09/2018 23:44 GMT
Dollar ends mixed on trade tension worries, sterling jumps on optimism of a Brexit deal
The greenback weakened against majority of its peers on Monday as U.S.-China trade tensions continued to weigh on the currency. Elsewhere, euro and sterling gained across the board on rise in Italian bonds and on renewed Brexit optimism after comments from EU Brexit chief negotiator Barnier.
Although the single currency met renewed selling at 1.1564 at Asian open and dropped to a 2-week low of 1.1526 at European open, price pared its losses and rebounded in European morning due to a rally in Italy bonds on weekend comments from Italy Economy Minister Tria and gained to 1.1584 in Europe. Price later rose in tandem with intra-day jump sterling to 1.1616 in New York morning before easing.
Reuters reported, speaking at a business conference on the shores of Lake Como, Tria said some of the coalition's more radical budget plans would only be introduced gradually, reassuring investors that EU fiscal rules would be respected.
"As the government puts words into actions, the (bond yield) spread will return to more normal levels," Tria said.
Although the British pound remained under pressure in Asia and dropped to session lows of 1.2897 in Europe, cable rebounded to 1.2957 (Reuters) on upbeat U.K. GDP data. Despite a brief retreat to 1.2922 ahead of New York open, price jumped to 1.3052 in New York morning on Brexit positive comments from EU's Barnier before easing on profit taking.
Gross domestic product in the three months to July was 0.6 percent higher than in the previous three-month period, gathering pace from 0.4 percent recorded in the three months to June and at the top end of forecasts in a Reuters poll.
Reuters reported the European Union's Brexit negotiator Michel Barnier told a forum in Slovenia on Monday that it was "realistic" to expect a divorce deal with Britain in six to eight weeks, the British embassy to Slovenia said on Twitter.
On the data front, Sentix's index for the euro zone fell to 12.0 from 14.7 points in August. The Reuters consensus forecast was for a dip to 14.6.
In other news, Prime Minister Theresa May hopes parliament will support her plan for Brexit, her spokesman said on Monday, adding it was the only one on the table which delivered on the will of the British people while avoiding a hard border in Northern Ireland. "Chequers is the only plan on the table which will deliver on the will of the British people while avoiding a hard border in Northern Ireland. The prime minister is working hard to secure a deal and hopes all MPs (members of parliament) will be able to support it," the spokesman said.
Data to be released on Tuesday :
New Zealand retail sales, Australia NAB business conditions, NAB business confidence, France non-farm payrolls, UK claimant count, ILO unemployment rate, employment change, average weekly earnings, Germany ZEW economic sentiment, ZEW current conditions, EU ZEW economic sentiment, Canada housing starts, and U.S. redbook, JOLTS job openings, wholesale inventories, wholesale sales.
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