Dollar gains broadly on upbeat U.S. data, sterling hits 3-month lows on Brexit impasse

Market Review - 17/05/2019 00:07GMT  

Dollar gains broadly on upbeat U.S. data, sterling hits 3-month lows on Brexit impasse

The greenback gained against majority of its peers on Thursday on rising U.S. Treasury yields together with release of upbeat U.S. economic data. The British pound fell to a 3-month low on continued Brexit and U.K. leadership concerns while the single currency remained on the back foot ahead of European parliamentary election next week.  
Reuters reported U.S. housing starts rose 5.7% to a seasonally adjusted annual rate of 1.235 million units last month, driven by gains in the construction of both single- and multi-family housing units, the Commerce Department said on Thursday. Groundbreaking was also likely boosted by drier weather in the Midwest.   Reuters reported the number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to sustained labor market strength that should underpin the economy as growth slows.     
Initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 212,000 for the week ended May 11, the Labor Department said on Thursday. Data for the prior week was unrevised.    
Economists polled by Reuters had forecast claims would fall to 220,000 in the latest week. The Labor Department said no states were estimated last week.    
Data for March was revised up to show homebuilding rising to a pace of 1.168 million units, instead of falling to a rate of 1.139 million units as previously reported.   
Versus the Japanese yen, although dollar initially fell to 109.34 in Asian morning on weakness in the Nikkei 225, price rebounded to 109.53 and later rallied to session highs at 109.97 in New York on gains in U.S. equities as well as rising U.S. Treasury yields.  
The single currency went through a volatile session. Although euro traded with a firm bias in Asia and rose to +session highs at 1.1225 (Reuters)+ in Europe on continued optimism that U.S. will delay its auto-tariffs, price erased its gains and dropped to an 8-day low of 1.1167 in New York as investors remained cautious ahead of European parliamentary elections next week together with usd's broad-based strength.   
Although the British pound moved sideways in Asia, price met renewed selling at 1.2852 and fell to 1.2821 in European morning and then tumbled to a 3-month low at 1.2788 in New York morning on continued Brexit deadlock over UK government and opposition Labour Party before moving narrowly.  
Reuters reported Britain's Labour Party will vote against the Withdrawal Agreement Bill if there is no deal between the government and the opposition party, its Brexit spokesman Keir Starmer said on Thursday.   
In other news, Reuters reported British Prime Minister Theresa May will discuss a timetable for the election of a new Conservative Party leader no matter what the result of a vote on the second reading of her Withdrawal Agreement Bill, the chairman of the 1922 Committee said.  
Reuters reported Economy Minister Giovanni Tria said on Thursday Italian debt will not rise to 140% of GDP, after comments from the ruling coalition suggesting the government may flout European Union public finance rules roiled financial markets.   
Tria encouraged investors to buy Italian bonds, saying that after recent rises in yields they are now a "bargain", and he reiterated there was no risk of Italy quitting the euro zone.   
On the data front, Reuters reported Philadelphia Fed business conditions May 16.6 vs April 8.5.   
Data to be released on Friday :  
New Zealand manufacturing PMI, PPI inputs, PPI outputs, EU construction output, HICP, and U.S. leading indicator, University of Michigan sentiment.  

Trendsetter does not warrant or guarantee the accuracy, timeliness or completeness to its service or information contained therein. Trendsetter does not give, whatsoever, warranties, expressed or implied, to the results to be obtained by using its services or information it provided. Users are trading on their own risk and Trendsetter shall not be responsible under any circumstances for the consequences of such activities. Trendsetter and its affiliates, in no event, be liable to users or any third parties for any consequential damages, however arising, including but not limited to damages caused by negligence whether such damages were foreseen or unforeseen.

Feed news

Latest Forex Analysis

Editors’ Picks

EUR/USD recovery reaches critical 1.1170 price zone

The EUR/USD pair bounced from a fresh multi-year low of 1.1106, although the advance stalled in the 1.1170 region, with the pair having been unable to extend gains beyond it since last Friday. Bulls to become more courageous if the advance extends beyond 1.1200.


GBP/USD modestly up for the day after flirting with 1.2600

The GBP/USD pair is poised to close in positive ground for the first time in ten days, a result of an extremely overbought dollar and US data giving bulls a reason to take some profits out of the table. Brexit chaos persists, Pound gains unlikely.


USD/JPY slumps to mid-109s as 10-year US T-bond yield drops 4% today

The bearish pressure surrounding the USD/JPY pair gathered strength in the American trading hours and dragged the USD/JPY pair to a weekly low of 109.50.


Market confidence in doldrums as PMI surveys plummet

US and German PMI surveys failed to muster any form of confidence in the growth picture, with stocks and the dollar under pressure today. The UK political picture looks bleak, with the chances of a no-deal Brexit or general election rising with May’s departure. 

Read more

Gold jumps to weekly tops and retreats, still well bid near $1280 level amid risk-off mood

Gold built on its intraday positive move and spiked to fresh weekly tops, around the $1284 region in the last hour, albeit retreated a bit thereafter.

Gold News