Friday June 19, 2009 - 00:03:57 GMT
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European currencies weakened against the dollar on weak economic data Market Review - 18/06/2009 21:57
All times in GMT
European currencies weakened against the dollar on weak economic data
dollar swung gains and losses against the British pound and euro on
volatile Thursday following weak U.K. retail sales data and rumours on
central bank intervention. In addition, the mixed U.S. data,
weaker-than-expected jobless claims data and Philadelphia Fed survey
somehow increased dramatic also gaive extra volatility to the foreign
In European morning, the British pound
staged a rebound to as high as 1.6469 versus the dollar, however, cable
was unable to grab a foothold above the 1.6400 level and it tumbled in
part due to cross selling with eur/gbp surged from 0.8492 to 0.8606
while gbp/jpy tumbled from 158.08 to 154.98. U.K. retail sales
unexpectedly slipped to â€“0.6% in May from 0.9% in April. This
worse-than-expected retail sales data weighed on sterling as the data
disappointed investors for this was the first decline in three months.
There was some talk that U.K. financial shares will be under pressure
if BOE Governor Mervyn King's plans to restrict the size of banks are
carried through. In New York morning, the pound staged a strong rebound
to 1.6399 against the dollar after the release of U.S. jobless claims
(608,000 compared to the readings of 605,000 from the previous week)
that was the largest one-week drop since November 2001 and the
stronger-than-expected Philadelphia Fed survey that bolstered hopes
that U.S. economy was on a stable path to recovery.
European session earlier, euro rallied to 1.5130 versus Swiss franc
after Swiss Nation Bank left interest rates unchanged at 0.25% as
widely expected but euro tumbled to 1.5025 after SNB Governor Roth
stated that the central bank had achieved its aim with foreign exchange
intervention was successful and controlling the franc's rise against
the euro. The pair then rebounded strongly to 1.5149 on rumors of
central bank intervention, however, Bank of International Settlement
(BIS), ECB and SNB have all declined to comment.
New York opening, euro gyrated inside a 100-point trading range against
the greenback, however, the single currency rose to as high as 1.4002
versus the dollar after the release of jobless claim (June was 608k vs
May 605k). Then euro tumbled from there as news of a change in the
definition of the London interbank boosted speculations yields on U.S.
investments will move higher.
Data to be released on Friday are BoJ minutes, German PPI, and Canada retail sales.
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