04:36
baskar p
Although the single currency edged higher to 1.4533 at Asian midday following Monday's rise to a near 2-month high of 1.4550, failure to re-test this resistance caused price to retreat at European open, the pair tumbled sharply to 1.4385 due to weaker-than-expected EU data together with the widening bond yield spread (Italian/German 10-year government bond yield spread rose above 300 basis points, the highest since ECB started buying the bonds) but later pared its losses on rumours the ECB bought significant amount of Italian 10-year bonds. Euro eventually recovered to 1.4465 in NY afternoon after the release of FOMC minutes.
The single currency was pressured as Italy sold 7.7 billion euros ($11.1 billion) of debt, including 3.75 billion euros of 10-year bonds, with the average yield of 5.22%, down from a yield of 5.77% in July. The auction was disappointing as bids for the 10-year supply exceeded the amount on offer by just 1.27 times.
EU economic and consumer sentiment were worse than expected, coming in at 98.3, the lowest since May 2010, and -16.5 vs forecasts of 100.5 and -12.0 respectively whilst EU business climate and industrial sentiment in Aug came in at 0.07 and -2.9 vs forecasts of 0.15 and -1.5 respectively.
FOMC minutes for August showed most members agreed economic outlook had deteriorated enough to warrant a response and some wanted more substantial action. They discussed a range of tools reinforcing forward guidance such as asset purchases and increasing the average maturity of the Fed's balance sheet.
Versus the Japanese yen, the greenback fell sharply from Australian high at 76.97 to 76.66 in European morning due to broad-based selling of yen. Despite dollar's recovery to 76.89, the pair dropped again to 76.61 on the worse-than-expected U.S. consumer confidence (44.5 vs forecast of 52.0 and the previous figure of 59.2) before stabilising.
Although the British pound ratcheted higher to 1.6419 at Asian midday, cable tumbled sharply in tandem with euro to an intra-day low of 1.6255 before rebounding to 1.6318 in NY afternoon on short-covering after the release of FOMC minutes.
Data to be released on Wednesday include:
U.K. Gfk consumer confidence, Japan manufacturing PMI, industrial production, construction orders, housing starts, New Zealand NBNZ business confidence, Australia private-sector credit, Germany retail sales, unemployment rate, Unemployment change, EU HICP flash, unemployment rate, Canada GDP, U.S. ADP unemployment rate, Chicago PMI, factory orders, durable goods.
The single currency was pressured as Italy sold 7.7 billion euros ($11.1 billion) of debt, including 3.75 billion euros of 10-year bonds, with the average yield of 5.22%, down from a yield of 5.77% in July. The auction was disappointing as bids for the 10-year supply exceeded the amount on offer by just 1.27 times.
EU economic and consumer sentiment were worse than expected, coming in at 98.3, the lowest since May 2010, and -16.5 vs forecasts of 100.5 and -12.0 respectively whilst EU business climate and industrial sentiment in Aug came in at 0.07 and -2.9 vs forecasts of 0.15 and -1.5 respectively.
FOMC minutes for August showed most members agreed economic outlook had deteriorated enough to warrant a response and some wanted more substantial action. They discussed a range of tools reinforcing forward guidance such as asset purchases and increasing the average maturity of the Fed's balance sheet.
Versus the Japanese yen, the greenback fell sharply from Australian high at 76.97 to 76.66 in European morning due to broad-based selling of yen. Despite dollar's recovery to 76.89, the pair dropped again to 76.61 on the worse-than-expected U.S. consumer confidence (44.5 vs forecast of 52.0 and the previous figure of 59.2) before stabilising.
Although the British pound ratcheted higher to 1.6419 at Asian midday, cable tumbled sharply in tandem with euro to an intra-day low of 1.6255 before rebounding to 1.6318 in NY afternoon on short-covering after the release of FOMC minutes.
Data to be released on Wednesday include:
U.K. Gfk consumer confidence, Japan manufacturing PMI, industrial production, construction orders, housing starts, New Zealand NBNZ business confidence, Australia private-sector credit, Germany retail sales, unemployment rate, Unemployment change, EU HICP flash, unemployment rate, Canada GDP, U.S. ADP unemployment rate, Chicago PMI, factory orders, durable goods.
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