Market Review - 23/04/2015 20:18GMT
U.S. dollar falls broadly on weaker-than-expected new home sales data
The single currency swung wildly again on Thursday. Despite brief drop to 1.0667 in European morning on continued concerns over Greece's debt payments, euro rebounded strongly on short-covering together with the release of Germany's GfK consumer sentiment indicator which rose to the highest in 13.5 years at 10.1 in May . Euro rose to 1.0782 in New York morning before retreating to 1.0733, however, the pair rose again on dollar's broad-based weakness after the release of much weaker-than-expected U.S. new home sales which dropped by 11.4% to 0.481 million in March.
Reuters reported earlier on Thursday European Commission Vice President Jyrki Katainen said on a visit to Athens that European partners' trust in Greece has fallen and made negotiations harder but the country's problems can still be solved if all sides do their part.
ECB's Praet said euro economy seems now to be turning corner; while business cycle improving, decline in euro zone's potential growth rate not yet addressed; structural reforms need to go hand in hand with monetary policy to make recovery a lasting one; European ccy looks relatively normal in cyclical conditions - we have not seen exuberant movement.
German Chancellor Angela Merkel said near New York close on Thursday that everything must be done to prevent Greece running out of money before a debt deal.
The greenback extended this week's rally to 120.09 in Asian on Thursday and climbed to 120.09 before retreating to 119.67, however, renewed buying in Europe lifted the pair again. Price re-tested 120.09 near New York opening before tumbling to an intra-day low of 119.43 near New York close. On the data front, the Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 49.7 in April from a final 50.3 in March. The index fell below the 50 threshold that separates contraction from expansion for the first time since May last year. New orders fell to a preliminary 48.5 fm 49.4 in March, contacting for a 2nd straight month and at a faster clip. The output index fell to 49.7 in April, its 1st contraction in 9 months.
The index for new export orders also fell to a preliminary 51.0 fm a final 52.0 in the previous month, but continued to expand as the weak yen helped improve Japanese exporters' price competitiveness.
Cable pared intra-day losses after hitting a low of 1.4960 (Reuters) when U.K. retail sales surprised to the downside. The British pound later rallied to as high as 1.5070 on dollar's broad-based weakness after the release of much weaker-than-expected U.S. new home sales data.
Friday will see the release of Germany's Ifo business climate and U.S. durable goods.
U.S. dollar falls broadly on weaker-than-expected new home sales data
The single currency swung wildly again on Thursday. Despite brief drop to 1.0667 in European morning on continued concerns over Greece's debt payments, euro rebounded strongly on short-covering together with the release of Germany's GfK consumer sentiment indicator which rose to the highest in 13.5 years at 10.1 in May . Euro rose to 1.0782 in New York morning before retreating to 1.0733, however, the pair rose again on dollar's broad-based weakness after the release of much weaker-than-expected U.S. new home sales which dropped by 11.4% to 0.481 million in March.
Reuters reported earlier on Thursday European Commission Vice President Jyrki Katainen said on a visit to Athens that European partners' trust in Greece has fallen and made negotiations harder but the country's problems can still be solved if all sides do their part.
ECB's Praet said euro economy seems now to be turning corner; while business cycle improving, decline in euro zone's potential growth rate not yet addressed; structural reforms need to go hand in hand with monetary policy to make recovery a lasting one; European ccy looks relatively normal in cyclical conditions - we have not seen exuberant movement.
German Chancellor Angela Merkel said near New York close on Thursday that everything must be done to prevent Greece running out of money before a debt deal.
The greenback extended this week's rally to 120.09 in Asian on Thursday and climbed to 120.09 before retreating to 119.67, however, renewed buying in Europe lifted the pair again. Price re-tested 120.09 near New York opening before tumbling to an intra-day low of 119.43 near New York close. On the data front, the Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 49.7 in April from a final 50.3 in March. The index fell below the 50 threshold that separates contraction from expansion for the first time since May last year. New orders fell to a preliminary 48.5 fm 49.4 in March, contacting for a 2nd straight month and at a faster clip. The output index fell to 49.7 in April, its 1st contraction in 9 months.
The index for new export orders also fell to a preliminary 51.0 fm a final 52.0 in the previous month, but continued to expand as the weak yen helped improve Japanese exporters' price competitiveness.
Cable pared intra-day losses after hitting a low of 1.4960 (Reuters) when U.K. retail sales surprised to the downside. The British pound later rallied to as high as 1.5070 on dollar's broad-based weakness after the release of much weaker-than-expected U.S. new home sales data.
Friday will see the release of Germany's Ifo business climate and U.S. durable goods.
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