Acetrader-Daily Market Outlook 8-11-2010
Market Review - 05/11/2010 20:53 GMT
Dollar rallies after robust U.S. jobs report
The greenback rose strongly especially against yen and euro on Friday as optimism over the recovery of U.S. economy grew after release of solid U.S. jobs data.
Although the greenback rose briefly to 81.00 against the Japanese yen in Asian morning on short-covering, dollar fell from there after BOJ kept overnight call rate target unchanged at 0-0.1% and concluded its policy review without easing policy further. Later, the greenback rebounded from 80.62 and jumped to 81.48 after U.S. non-farm payrolls posted a surprise increase of 151k jobs, beating street estimate of 60k and private payrolls also showed a big increase of 159k versus the forecast of 80k.
The single currency edged lower from 1.4249 in Australia and fell sharply in European morning on broad-based long liquidation, partly triggered by renewed eurozone debt worries as Irish/German 10-year bond yield spread rose to a fresh record high of 550 basis points. Euro dropped further to 1.4034 after the release of stronger-than-expected U.S. non-farm payrolls. The single currency eventually weakened to 1.4023 in NY mid-day and closed near the day's low at 1.4032.
The British pounded ratcheted lower from 1.6295 on active profit-taking and tanked to 1.6167 on rumour of a huge sterling selling order by U.K. Standard Chartered bank but the actual amount was found much less than rumour. However, cable edged higher in NY morning as cross buying in sterling versus euro (eur/gbp tumbled from 0.8778 to 0.8653) cushioned cable's downside, price climbed back to 1.6261 and then retreated in NY afternoon.
Economic data to be released next week include:
Japan Leading indicators, Swiss Unemployment rate, Germany Trade balance (euro), Export , Import, Current account, Industrial prod'n, Canada Housing starts on Monday, Japan Current account,Trade balance (jpy), Economic watch DI, Machine tool orders, Australia NAB business confidence, Germany CPI final, HICP final, U.K. BRC retail sales, RICS house prices, Industrial prod'n, Manufacturing prod'n, Trade balance (gbp), Canada New housing price index, U.S. Wholesale inventories on Tuesday, Australia W'pac consumer confi., Japan Consumer confidence, Germany WPI, U.S. Trade balance (usd), Export price index, Jobless claims, Fed budge, Canada Trade balance (cad), Exports, Imports on Wednesday, Japan Domestic CGPI , Machine orders , Australia Unemployment rate, Employment change on Thursday (U.S. is closed for holiday), U.K. N'wide Consumer Confi. , Germany GDP flsh , EU GDP , Industrial prod'n , U.S. U. Michigan survey Prel. On Friday.
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Dollar rebounds from a fresh eight-month low against yen on upbeat U.S. economic data
The single currency continued its descent this week and tumbled sharply to a 10 year-low against the yen and to a 6-month low against the greenback on speculation over the possibility of a Greece default and the resignation of European Central Bank executive board member and also its chief economist Jurgen Stark.
The single currency briefly rallied in European morning on Wednesday after German Constitutional Court rejected lawsuits aimed at blocking the country's participation in eurozone bailouts, easing worries about eurozone debt crisis.
Increasing worries about the Christian Democratic union's most beleaguered states sent the euro lower against the dollar on Monday for the fifth day straight to its lowest level since August 5.
Although dollar weakened broadly after release of worse-than-expected U.S. non-farm payrolls report as the gloomy data fuelled expectations of possible quantitative easing by the Federal Reserve at its next FOMC meeting later this month. The selloff in U.S. stocks triggered renewed risk-aversion activities and led to short-covering purchase of the greenback across the board in New York afternoon.
The Swiss franc rose against all its major counterparts on Wednesday as the Swiss National Bank has not recently signalled further intervention. Although the franc retreated as Swiss Economy Minister Johann Schneider-Ammann said it was still massively overvalued, the pair remained supportive as he also said Switzerland would have to keep living with the strong franc for some time.
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The single currency continued its descent this week and tumbled sharply to a 10 year-low against the yen and to a 6-month low against the greenback on speculation over the possibility of a Greece default and the resignation of European Central Bank executive board member and also its chief economist Jurgen Stark.
The single currency continued its recent steep descent and tumbled on Thursday against all major currencies as ECB President Jean-Claude Trichet, whose 8-year term will end on October 31, said in ECB's monetary policy press conference that there is 'intensified downside risks' in European economy and inflation has remained elevated. Later in NY afternoon, euro extended its intra-day decline after Fed Chairman Ben Bernanke did not provide details of any new stimulus measures, however, he said 'Fe
The single currency briefly rallied in European morning on Wednesday after German Constitutional Court rejected lawsuits aimed at blocking the country's participation in eurozone bailouts, easing worries about eurozone debt crisis.
Increasing worries about the Christian Democratic union's most beleaguered states sent the euro lower against the dollar on Monday for the fifth day straight to its lowest level since August 5.
Although dollar weakened broadly after release of worse-than-expected U.S. non-farm payrolls report as the gloomy data fuelled expectations of possible quantitative easing by the Federal Reserve at its next FOMC meeting later this month. The selloff in U.S. stocks triggered renewed risk-aversion activities and led to short-covering purchase of the greenback across the board in New York afternoon.
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