Market Review - 13/11/2017 22:12GMT
Dollar ends mixed, sterling tumbles on comcens over UK's leadership challenge
The greenback ended mixed against majority of its peers after a choppy session on Monday. The British pound tumbled on market concerns as U.K.'s Prime Minister Theresa May faced leadership challenge from Conservative lawmakers.
Although the British pound opened flat in New Zealand on Monday, traders quickly sold sterling broadly on weekend media report 40 MPs from Prime Minister Theresa May's Conservative Party have agreed to sign a letter of no-confidence in her, the Sunday Times newspaper reported.
That is eight short of the number needed to trigger a party leadership contest, the mechanism through which May could be forced from office and replaced by another Conservative.
Cable tumbled from 1.3198 to 1.3108 shortly after Asian open. Despite briefly recovering to 1.3134, cable then came under renewed heavy selling pressure and fell to session lows at 1.3062 in European morning due to market woes on leadership challenge and uncertain outcome of the Brexit talks. Later, price later staged a short-covering rebound to 1.3135 in New York morning before swinging sideways.
Despite extending gains from last Thursday's low at 113.09 to 113.72 at Asian open, price dropped to 113.35 ahead of European open due to intra-day retreat in U,S. yields. Dollar hit session lows of 113.25 at New York morning before paring its losses and climbed to 113.66 on rebound in U.S. yields, price last traded near 113.63 at the close.
The single currency moved in a choppy fashion on Monday's session. Despite briefly rising to 1.1665 ahead of Asian open, price was dragged lower by intra-day selloff in sterling and dropped to 1.1646 then 1.1638 at European morning. However, renewed buying lifted the euro and price ratcheted higher in tandem with sterling to 1.1675 in New York morning before moving narrowly in subdued NY session.
In other news, ECB's Constancio said; 'we are not yet fulfilling our mandate and that is why monetary policy will have to continue to be very accommodative; business confidence is at a decade high, and survey data point to continued growth in the period ahead.'
Data to be released on Tuesday:
Australia NAB business conditions, NAB business confidence, China industrial output, retail sales, Germany GDP, CPI, HICP, ZEW economic sentiment, ZEW current conditions, Swiss producer/import price, Italy GDP, CPI, U.K. CPI, core CPI, RPI, core RPI, PPI input prices, PPI output prices, PPI core output, EU GDP, industrial production, and U.S. PPI, core PPI, redbook.
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