Monday July 20, 2009 - 01:35:30 GMT
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Trendsetter Financial Markets Limited - www.acetraderfx.com
Dollar ends mixed after strong U.S. housing starts and disappointing corporate earnings
Market Review - 17/07/2009 23:02 All times in GMT Dollar ends mixed after strong U.S. housing starts and disappointing corporate earnings
ended mixed in New York on Friday after an initial rebound vs European
and the 3 commodity currencies on news of 2 bomb blasts in Jakarta
prompted investors to flock to the greenback as a safe-haven currency
in Asian morning trading. However, later in the day, dollar retreated
in New York opening before moving sideways after a mixed batch of U.S.
corporate earnings raised some concerns about the economy and increased
the dollarâ€™s appeal. Later in the day, earning results came out for
Bank of America and Citigroup, the No.1 and No. 3 banks by assets, fell
short of market expectations. These disappointing results pared some
hopes for growth resuming in the near future and lifted the dollar in
New York afternoon session. The ICE dollar index that measures the
greenback against a basket of currencies added 0.2% after falling to a
six-week low on Thursday.
In early European session,
eurozone posted trade balance in May at 1.9 billion euros compared to
economistsâ€™ consensus forecast of 2.7 billion. The market reaction to
this data was somehow muted as the focus was on U.S. companies'
earnings transcripts. In New York morning, euro fell from its recent
high of 1.4166 formed on Thursday to as low as 1.4062 versus the dollar
partly due to long liquidation and the discouraging results from Bank
of America and Citigroup. However, the single currency was able to
recover some of its intra-day losses against the greenback after the
release of better-than-expected U.S. housing data. U.S. building
permits and housing starts rose by 8.7% to 0.563 million units and by
3.6% m/m 0.582 million units versus the economists' forecast of 0.520
million and 0.530 million respectively. Euro retreated in late New York
afternoon after Moodyâ€™s Investor Service placed AAA ratings of
Californiaâ€™s two main public pensions, California Public Employees
Retirement System and California State Teachers Retirement System, on
review for a possible downgrade, citing concerns about the declining
credit quality of the state.
The British pound fell to an
intra-day low of 1.6266 partly due to a report from International
Monetary Fund stated that 'U.K. Prime Minister Gordon Brown risks
putting further pressure on sterling unless he curbs Britainâ€™s budget
deficit'. Earlier, news came out in Asian morning of 2 bomb blasts in
Jarkarta which renewed demand for U.S. dollar as a refuge from turmoil.
However, sterling found buying interest on dips and pared its intra-day
losses against the greenback after the release of upbeat U.S. housing
data before retreating after Moody's news later in the day.
will be a holiday in Japan. Data to be released next week include U.K.
Rightmove housing price, Australia PPI, German PPI, Canada wholesales
sales, U.S. leading indicators on Monday, BoJ minutes, Australia board
minutes, Switzerland trade balance, U.K. PSNCR, Canada BoC rate
decision and a speech by Fedâ€™s Bernanke on Tuesday, eurozone industrial
orders, Canada retail sales, U.S. house price index on Thursday, German
and eurozone service and manufacturing PMI, German Ifo index, U.K. GDP,
U.S. University of Michigan survey on Friday.
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