Market Review - 16/04/2018 23:23GMT
Dollar weakens broadly due to easing of Syrian tension following Saturday's one-off missile strike
The greenback ended lower against its major peers on Monday despite release of mildly upbeat U.S. retail sales data due to fading geopolitical tension after Saturday's U.S./allied missile strike on Syria which did not prompt an immediate response from Russia. While rising U.S. stocks, falling U.S. Treasury yields together with U.S. President Donald Trump's tweet also contributed to dollar's overall weakness.
Reuters reported U.S. President Donald Trump accused Russia and China on Monday of devaluing their currencies while the United States raises interest rates.
"Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!" Trump said in a Twitter post.
Versus the Japanese yen, despite edging up to 107.61 in Australia, dollar met renewed selling and fell to 107.13 ahead of European open as investors are not fully convinced that geopolitical tension in Syria has completely diminished before rebounding to 107.39 at New York open. However, falling U.S. Treasury yields pressured price and dollar fell to session lows of 107.04.
Although the single currency moved sideways in Asia and briefly dipped to 1.2324 at European open, price found renewed buying and rallied in tandem with sterling to 1.2373 in Europe and then climbed to session highs of 1.2395 in New York morning before retreating to 1.2362 on profit taking, price last traded at 1.2378 near the close.
The British pound was the strongest currency vs the usd on Monday. Price initially gained to 1.4266 in Asia before retreating to 1.4238 at European open. However, cross-buying in sterling lifted price and cable later rallied to a fresh 11-week high of 1.4335 near the close, just shy of its 2018 peak at 1.4346 made in January.
In other news, Reuters reported the Federal Reserve will likely gradually raise interest rates three or four times in total this year and could aim to eventually raise the policy rate to about 3 percent, New York Fed President William Dudley said in a television interview on Monday.
Reuters reported German and France are in intensive discussions about the future of the euro zone, with areas of agreement and disagreement, German government spokesman Steffen Seibert said on Monday.
On the data front, U.S. retail sales rose 0.6% in March the Commerce Department said on Monday. This was compared to a 0.1% drop in the previous month. Economists had forecast a reading of 0.4%.
Data to be released on Tuesday:
New Zealand GDT price index, Japan industrial production, capacity utilization, China retail sales, GDP, Italy CPI, trade balance EU, trade balance non-EU, U.K. claimant count, ILO unemployment rate, average weekly earnings, Germany ZEW economic sentiment, ZEW current conditions, EU ZEW economic sentiment, U.S. building permits, housing starts, redbook, industrial production, capacity utilization, manufacturing output, and Canada manufacturing sales
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