Market Review - 15/11/2017 00:12GMT
Dollar falls broadly, euro rallied on upbeat German data
The euro rose to a 2-1/2 week high against the greenback on Tuesday after release upbeat German GDP data and in-line EU GDP quarterly data which surpassed growth in the U.S. economy.
German GDP recorded a growth of 0.6% in the third quarter vs previous reading of 0.6% whilst annual growth clocked up an increase of 2.3% vs previous reading of 0.8%. The European Union's statistics office Eurostat confirmed its estimate from Oct. 31 that the gross domestic product (GDP)of the 19 countries using the euro grew by 0.6 percent in July-September from the previous three months and was 2.5 percent higher than in the same period of 2016.
The single currency traded with a firm bias in Asia and despite a brief dip to 1.1666 in European morning, price rallied after release of German and EU GDP to 1.1727 ahead of New York open, price continued its intra-day ascent and hit a 2-1/2 week peak of 1.1805 in New York afternoon before easing.
Versus the Japanese yen, despite extending gains from last Thursday's low at 113.09 to 113.91 in European morning, price erased its gains and tumbled to 113.31 on broad-based usd weakness due partly to falling U.S. yields.
The British pound remained on the back foot on Tuesday's session. Despite briefly rising to 1.3129 at Asian open, cable came under selling pressure and fell to sessions lows at 1.3075 in European morning after soft U.K. inflation data. However, price erased intra-day losses and later rallied to session highs of 1.3186 in New York afternoon due to broad-based usd's weakness.
In a report, the UK Office for National Statistics (ONS) said the rate of consumer price inflation rose from the year before by a seasonally adjusted 3.0% last month matching September's reading. That was below forecasts for a 3.1% increase but remained at its highest level since March 2012. Month-over-month, consumer price inflation rose 0.1% in October, also below consensus expectations for a 0.2% advance and compared to the 0.3% gain registered in the previous month.
In other news, Reuters reported the prospects for the German economy remain encouragingly positive as high growth levels across Europe boost expectations for the coming six months, the ZEW research institute said on Tuesday after its index for investor morale rose in November.
On the data front, the producer price index for final demand increased 0.4 percent last month after a similar gain in September. In the 12 months through October, the PPI jumped 2.8 percent, the largest increase since February 2012.
Data to be released on Wednesday:
New Zealand retails sales, retail sales ex-autos, Japan GDP, industrial production, capacity utility index, Australia consumer sentiment, France CPI, U.K. claimant count, ILO unemployment rate, average weekly earnings, EU trade balance, and U.S. MBA mortgage application, CPI, core CPI, real weekly earnings, NY Fed manufacturing, retail sales, retail sales ex-autos, business inventories.
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