Dollar falls broadly on long liquidation despite upbeat U.S. data: Nov 30, 2016

Market Review - 29/11/2016  22:17GMT  

Dollar falls broadly on long liquidation despite upbeat U.S. data

Although the greenback rose against majority of its peers on Tuesday as the release of upbeat U.S. GDP and consumer confidence added to speculation of a Federal Reserve rate hike in December, price quickly erased intra-day gains in New York morning as investors continues to trim recent long positions ahead of release Friday's key jobs report.  
  
The second estimate of third quarter (Q3) gross domestic product (GDP) showed growth of 3.2%, revised up from the initial reading of a 2.9% expansion. Analysts were looking for a smaller upward revision to just 3.0%. Real consumer spending for the July to September period rose by 2.8%, compared to the initial 2.1% increase.  
  
Versus the Japanese yen, despite dropping to 111.62 in Australia, dollar found renewed buying and rebounded to 112.25 in Asian morning. Intra-day ascent accelerated in Europe and price rallied to an intra-day high at 113.34 in New York morning after the release of upbeat U.S. GDP, however, price quickly retreated to 111.27.  
  
The single current met renewed selling at 1.0623 in Australia and retreated to 1.0588 in Asian morning. Later, euro dropped to an intra-day low at 1.0565 at New York open on dollar's broad-based strength following the release of upbeat U.S. GDP data, however, renewed buying interest emerged above Tuesday's 1.0565 and lifted the pair, price later rallied back to 1.0655 at the close.  
  
Although the British pound initially dropped to session low at 1.2388 in Asian morning, price pared its losses and rebounded to 1.2417 ahead of European open. Cable continued to ratchet higher and rallied to an intra-day high at 1.2527 in Europe on cross-buying of sterling especially vs euro before stabilising.  
  
In other news, German FinMin Schaeuble said 'can't have situation where countries choose from menu about what parts of EU they want; four core principles of EU are sacred, they are non-negotiable; Europe has not taken seriously enough previous warnings from U.S. that it must take more responsibility for its own defence.'  
  
On the data front, the Conference Board, a market research group, said its index of U.S. consumer confidence rose to 107.1 this month from a reading of 100.8 in October, whose figure was revised from a previously reported 98.6. Analysts had expected the index to increase to 101.2 in November.  
  
Data to be released on Wednesday:  
  
Japan industrial production, construction orders, housing starts, Australia home sales, building permits, Germany unemployment, Italy CPI, HICP, PPI, EU inflation, Canada GDP, U.S. ADP employment, personal income, PCE index, Chicago PMI and pending home sales.