Dollar jumps on surprisingly strong U.S. durable goods order and other upbeat data: Nov 24, 2016

Market Review - 23/11/2016  22:16GMT  

Dollar jumps on surprisingly strong U.S. durable goods order and other upbeat data

The greenback rallied across majority of its peers on Wednesday as the release of robust U.S. economic data added to optimism over the country's economy and to expectations of a Federal Reserve rate hike next month. 

The U.S. Commerce Department said durable goods orders climbed 4.8% last month, compared to expectations for a gain of 1.5%. Core durable goods orders, which exclude volatile transportation items, rose 1% last month, compared to a forecast increase of 0.2%. 

Versus the Japanese yen, dollar traded sideways in Asia and briefly edged down to 110.86 ahead of European open before surging to a 7-1/2 month peak 112.98 in New York morning due to the release of robust U.S. data and other slew of upbeat U.S. data, however, price eased near New York close. 

The single currency briefly edged up to 1.0644 at European open before retreating to 1.0600 in European morning. Euro met renewed selling at 1.0637 and tumbled to a fresh 11-1/2 trough at 1.0526 in New York morning on dollar's broad-based strength. 

The British pound remained under pressure in Asia and weakened to 1.2368 in European morning. Despite a brief but sharp rise to 1.2435 ahead of New York open on UK Finance Minister Hammond's budget speech, price met renewed selling and tumbled to session low of 1.2360 in New York morning on dollar's strength before rallying back to as high as 1.2468 on active cross-buying in sterling. 

In other news, UK FinMin Hammond said 'UK economy's strength and resilience has confounded observers since Brexit vote; Brexit vote makes more urgent the need to tackle UK's weaknesses in housing and productivity; task now is to make economy resilient as it exits EU; will maintain commitment to fiscal discipline, recognise need for investment; monetary policy has played an important role in supporting growth since referendum; OBR forecasts gov't to achieve outright budget surplus as soon as practical, while leaving enough flexibility to support economy in near term; cyclically adjusted borrowing shud be below 2% by end of this parliament; upward revision to net debt forecasts partly reflects reclassification of BoE stimulus measures; stripping out BoE effect, UK public sector net debt forecast to peak at 82.4% of GDP this year.' 

On the data front, the U.S. Department of Labor said initial jobless claims in the week ending November 19 increased by 18K to 251K from the previous week’s total of 233K (initially 235K). Analysts had expected jobless claims to rise by 15K to 250K last week. 

Data to be released on Thursday: 

Australia capex, Japan manufacturing PMI, leading indicator, Germany GDP, import price index, Ifo data, France business climate, Italy trade balance, wage inflation, UK mortgage approvals and U.S. market holiday.