Market Review - 09/08/2018 23:41GMT
Dollar regains traction as investors buy the greenback broadly
The greenback caught a bid in New York trading against majority of its peers on Thursday as investors remained bullish about the U.S. economy and grew confident that the trade war tension may help narrow U.S. trade deficit.
Versus the Japanese yen, although dollar initially fell to an 11-day low at 110.71 in Asian morning due to escalation in U.S.-China trade tension, price found renewed buying and steadily climbed to session highs at 111.19 in Europe on renewed dollar's strength before falling U.S. Treasury yields pressured price to 110.86 in New York morning, however, price rebounded due to broad-based usd's strength and price traded at 111.07 near the close.
The single currency went through a volatile session. Price initially dipped to 1.1602 in Asian morning, then rebounded to 1.1619 before renewed selling emerged and knocked euro down to 1.1576 in European morning. Despite a brief rebound to 1.1606, price fell again and hit fresh 1-month lows of of 1.1526 in New York on broad-based selling in euro especially vs sterling.
The British pound went through a roller-coaster ride. Although cable fell to 1.2853 in Asian morning, then rebounded to 1.2890, price fell again in tandem with euro to a fresh 11-month low at 1.2842 in European morning before staging a strong rebound to session highs at 1.2912 as a report in The Business Insider triggered renewed Brexit optimism. However, the pound erased intra-day gain and tumbled to 1.2819 near New York close.
The Business Insider reported European leaders are ready to make a major concession to Theresa May by allowing Britain to remain in the single market for goods while opting out of the free movement of people.
Some member states have said they could abandon one of the European Commission's negotiating red lines in return for more concessions from their British counterparts, the Times reported.
In other news, Reuters reported risks to global growth are growing as the risk of protectionism and the threat of higher U.S. tariffs sap confidence, the European Central Bank said in a regular economic bulletin on Thursday.
The ECB added that if all the threatened measures were to be implemented, the average U.S. tariff rate would rise to levels not seen in the last 50 years.
On the data front, the U.S. Labor Department said its producer price index showed no change last month. In the 12 months through July, the PPI rose 3.3%. Economists had forecast the PPI rising 0.2% last month and increasing 3.4% from a year ago.
The so-called core PPI increased by 0.1% from a month earlier and rose 2.7% in the 12 months through July. Analysts had predicted core PPI to increase 0.2% month-on-month and 2.8% on an annualized basis.
Data to be released on Friday :
New Zealand manufacturing PMI, retail sales, Japan corporate goods price, GDP, tertiary industry index, France industrial output, Italy trade balance, global trade balance, UK GDP, industrial output, manufacturing output, construction output, trade balance, U.S. CPI, core CPI, real weekly earnings, Federal budget, and Canada employment change, unemployment rate.
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