Asian Session – Dollar main loser in busy Asian trading
March 13, 2014 7:39 am
There was a flurry of developments in financial markets during Thursday’s Asian trading and the overall effect was to push the dollar lower while safe haven currencies gained.
The euro made fresh 2 ½ year highs at 1.3948, with the 1.40 level now looking increasingly likely if the euro continues to rally. According to traders the euro was still capitalizing on the ECB’s refusal to deliver any monetary stimulus during its March 6 meeting.
The yen was also stronger following estimate-beating machinery orders for January. Orders jumped 13.4% month-on-month against estimates of a 7% increase. Machinery orders are considered a useful indicator of business investment. The dollar fell further below the 103 level at 102.55.
The Australian dollar rose sharply following the release of much stronger-than-expected February jobs numbers. Employment increased by 47.000 against expectations of a gain of 18.000. The fact that the unemployment rate stayed constant at 6.0% was due to more people rejoining the work force and actively looking for work. The aussie rallied 0.72% against the US dollar to trade at 0.9055.
In New Zealand, the Reserve Bank decided to lift its key rate to 2.75% from 2.50%, boosting the kiwi to its highest against the greenback in 8 months at around 0.8570. The RBNZ Governor indicated that there could be further rate increases over the next few months.
Data out of China cooled sentiment as it was on the disappointing side. Urban investment, industrial output and retail sales for February were all lower than expected, which could intensify worries about a Chinese economic slowdown.
Regarding geopolitical events, the European Union was seen implementing sanctions such as visa bans and asset freezes against selected individuals from Russia and the Ukraine. Such sanctions could take place as soon as Monday and could further escalate the crisis.
Gold made a new 6-month high just below 1375, helped by the negative geopolitical developments and dollar weakness.
Looking ahead, the most important event of the day was going to be advance retail sales for February out of the United States. These figures will be scrutinized for the effect of extreme cold weather in some parts of the US on consumers.
There was a flurry of developments in financial markets during Thursday’s Asian trading and the overall effect was to push the dollar lower while safe haven currencies gained.
The euro made fresh 2 ½ year highs at 1.3948, with the 1.40 level now looking increasingly likely if the euro continues to rally. According to traders the euro was still capitalizing on the ECB’s refusal to deliver any monetary stimulus during its March 6 meeting.
The yen was also stronger following estimate-beating machinery orders for January. Orders jumped 13.4% month-on-month against estimates of a 7% increase. Machinery orders are considered a useful indicator of business investment. The dollar fell further below the 103 level at 102.55.
The Australian dollar rose sharply following the release of much stronger-than-expected February jobs numbers. Employment increased by 47.000 against expectations of a gain of 18.000. The fact that the unemployment rate stayed constant at 6.0% was due to more people rejoining the work force and actively looking for work. The aussie rallied 0.72% against the US dollar to trade at 0.9055.
In New Zealand, the Reserve Bank decided to lift its key rate to 2.75% from 2.50%, boosting the kiwi to its highest against the greenback in 8 months at around 0.8570. The RBNZ Governor indicated that there could be further rate increases over the next few months.
Data out of China cooled sentiment as it was on the disappointing side. Urban investment, industrial output and retail sales for February were all lower than expected, which could intensify worries about a Chinese economic slowdown.
Regarding geopolitical events, the European Union was seen implementing sanctions such as visa bans and asset freezes against selected individuals from Russia and the Ukraine. Such sanctions could take place as soon as Monday and could further escalate the crisis.
Gold made a new 6-month high just below 1375, helped by the negative geopolitical developments and dollar weakness.
Looking ahead, the most important event of the day was going to be advance retail sales for February out of the United States. These figures will be scrutinized for the effect of extreme cold weather in some parts of the US on consumers.
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