Market Review - 13/02/2018 23:58GMT
Dollar weakens broadly especially vs yen on falling U.S. yields and stock market calmness
The greenback remained on the back foot on Tuesday as fell broadly, led by intra-day decline in dlr/yen and investors are turning to Wednesday's key U.S. inflation data for clues on direction due to recent volatility in U.S. stock market. Continued weakness in the U.S. Treasury yields also contributed to dollar's weakness in New York session.
Versus the Japanese yen, dollar remained under pressure and initially dipped to 108.61 at Asian open, then selling accelerated in Asian afternoon and tumbled to 107.43 at European morning on active yen buying as Nikkie turned negative. Despite a minor rebound to 107.74 in New York, falling U.S. yields pushed price lower to session lows of 107.41 before rebounding.
The single currency initially rose to 1.2307 in Australia, and despite a minor pullback to 1.2285 at Asian morning, intra-day selloff in dlr/yen helped price rally to 1.2331 at European morning, euro then ratcheted higher to session highs of 1.2371 in New York on broad-based usd's weakness before easing.
Although the British pound moved sideways in Asia, cable climbed in tandem with euro to 1.3870 at
European morning, then rallied to intra-day high of 1.3924 in Europe after U.K. inflation data beat estimate before retreating to 1.3850 in New York. However, renewed buying lifted price to 1.3903 but price later moved narrowly in New York afternoon.
In a report, the Office for National Statistics said that the annual rate of change in the consumer price index rose to 3.0% in January, the same as the prior month. Economists had expected a reading of 2.9%. Core CPI, which excludes food, energy, alcohol, and tobacco costs, rose to 2.7%, compared to 2.5% the month prior. Analysts had expected a reading of 2.6%.
In other news, Reuters reported Federal Reserve Chair Jerome Powell, at a ceremonial swearing-in as head of the central bank, said on Tuesday the Fed would keep watching for financial stability risks and preserve "essential" improvements in financial regulation since the 2007-2009 crisis.
Data to be released on Wednesday:
Japan GDP, GPD deflator, Germany GDP flash, CPI final, HICP final, Italy GDP, EU GDP flash, industrial production, and U.S. MBA mortgage application, CPI, real weekly earnings, retail sales, business inventories
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