Market Review - 12/02/2016 18:40GMT
Dollar gains broadly on upbeat U.S. retail sales
The greenback gained against majority of its peers on Friday after data showed U.S. retail sales increased in January, supporting the possibility of the Federal Reserve continuing to raise interest rates this year.
Retail sales excluding automobiles, gasoline, building materials and food services increased 0.6% last month, according to a Commerce Department report, a figure that outpaced expectations.
Versus the Japanese yen, the greenback dropped from Asian high at 113.02 to an intra-day low at 111.68 ahead of European open, however, dollar pared its losses and rallied to session high at 113.53 in New York afternoon due to release of upbeat U.S. retail sales.
The single currency weakened to 1.1292 in Asia and despite a brief rebound to 1.1325 at European open, renewed selling pressured the pair lower and euro tumbled to an intra-day low at 1.1214 at New York midday on dollar's broad-based strength.
The British pound rallied from Asian low at 1.4459 to an intra-day high at 1.4571 in European morning on cross-buying of sterling versus euro. However, cable pared its gains and tumbled to session low at 1.4443 at New York midday on dollar's strength before recovering strongly to 1.4522 in New York afternoon.
In other news, Fed's Dudley said 'policy is data dependent but also reacts to financial market conditions; hard to tell how much of market selloff is based on economic fundamentals; selloff reflects developments abroad; hard to tell consequences for u.s.; financial conditions have tightened in recent weeks; financial market developments will factor into fomc policy decisions; will take longer to reach 2 pct inflation goal; inflation expectations have ticked down but not unanchored; negative rates globally have little effect on u.s. economy-negative interest rates should not be part of conversation right now in u.s.'
Data to be released:
Japan's GDP, industrial production, tertiary industry index, capacity utilization, China's imports, exports, trade balance, U.K. house price index and Eurozone trade balance in Monday.
New Zealand retail sales, inflation expectation, Italy trade balance, U.K. CPI, core CPI, retail price index, producer price index, house price index, Germany ZEW current situation, economic sentiment, Eurozone economic sentiment, Canada manufacturing sales, U.S. housing market index, overall capital flows, foreign buying T-bond, NY Empire State manufacturing index and net long-term TIC flows on Tuesday.
Australia Westpac leading index, Japan machinery order, U.K. unemployment rate, average earning, unemployment change, Swiss investor sentiment, Eurozone construction output, U.S. mortgage application, build permits, housing starts, producer price index, Redbook, industrial production and capacity utilization on Wednesday.
New Zealand producer price index, Japan exports, imports, trade balance, Australia, unemployment rate, employment, participation rate, China CPI, producer price index, Swiss exports, imports, trade balance, France CPI, inflation, Eurozone current account, U.S. initial jobless claims, Philadelphia Fed manufacturing survey, CB leading indicator and Canada wholesale sales on Thursday.
Japan all industry activity index, Germany producer price index, U.K. retail sales, public sector net borrowing, CB leading economic index, Eurozone consumer confidence, U.S. CPI, core CPI, Canada CPI, core CPI and retail sales on Friday.
Dollar gains broadly on upbeat U.S. retail sales
The greenback gained against majority of its peers on Friday after data showed U.S. retail sales increased in January, supporting the possibility of the Federal Reserve continuing to raise interest rates this year.
Retail sales excluding automobiles, gasoline, building materials and food services increased 0.6% last month, according to a Commerce Department report, a figure that outpaced expectations.
Versus the Japanese yen, the greenback dropped from Asian high at 113.02 to an intra-day low at 111.68 ahead of European open, however, dollar pared its losses and rallied to session high at 113.53 in New York afternoon due to release of upbeat U.S. retail sales.
The single currency weakened to 1.1292 in Asia and despite a brief rebound to 1.1325 at European open, renewed selling pressured the pair lower and euro tumbled to an intra-day low at 1.1214 at New York midday on dollar's broad-based strength.
The British pound rallied from Asian low at 1.4459 to an intra-day high at 1.4571 in European morning on cross-buying of sterling versus euro. However, cable pared its gains and tumbled to session low at 1.4443 at New York midday on dollar's strength before recovering strongly to 1.4522 in New York afternoon.
In other news, Fed's Dudley said 'policy is data dependent but also reacts to financial market conditions; hard to tell how much of market selloff is based on economic fundamentals; selloff reflects developments abroad; hard to tell consequences for u.s.; financial conditions have tightened in recent weeks; financial market developments will factor into fomc policy decisions; will take longer to reach 2 pct inflation goal; inflation expectations have ticked down but not unanchored; negative rates globally have little effect on u.s. economy-negative interest rates should not be part of conversation right now in u.s.'
Data to be released:
Japan's GDP, industrial production, tertiary industry index, capacity utilization, China's imports, exports, trade balance, U.K. house price index and Eurozone trade balance in Monday.
New Zealand retail sales, inflation expectation, Italy trade balance, U.K. CPI, core CPI, retail price index, producer price index, house price index, Germany ZEW current situation, economic sentiment, Eurozone economic sentiment, Canada manufacturing sales, U.S. housing market index, overall capital flows, foreign buying T-bond, NY Empire State manufacturing index and net long-term TIC flows on Tuesday.
Australia Westpac leading index, Japan machinery order, U.K. unemployment rate, average earning, unemployment change, Swiss investor sentiment, Eurozone construction output, U.S. mortgage application, build permits, housing starts, producer price index, Redbook, industrial production and capacity utilization on Wednesday.
New Zealand producer price index, Japan exports, imports, trade balance, Australia, unemployment rate, employment, participation rate, China CPI, producer price index, Swiss exports, imports, trade balance, France CPI, inflation, Eurozone current account, U.S. initial jobless claims, Philadelphia Fed manufacturing survey, CB leading indicator and Canada wholesale sales on Thursday.
Japan all industry activity index, Germany producer price index, U.K. retail sales, public sector net borrowing, CB leading economic index, Eurozone consumer confidence, U.S. CPI, core CPI, Canada CPI, core CPI and retail sales on Friday.
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