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Asian Session – Dollar remains weak after disappointing U.S. consumer sentiment data
August 19, 2013 6:28 amVideo
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Broad U.S. dollar weakness remained in early Monday trading and kept currency markets subdued during the Asian session. Investor appetite was dampened since Friday’s tepid U.S. economic data which showed disappointing consumer sentiment numbers.
The Thomson Reuters/University of Michigan’s preliminary reading for consumer sentiment fell to the worst in four months in August, down to 80 from 85.1 in July.
Asian investors had a chance to react to the bad news today and this was evident in their unwillingness to buy the USD and resulted in most major pairs remaining in ranges from Friday.
Dollar direction will depend on economic data and news out of the U.S., with some key risk this week as the Federal Reserve meeting minutes will be released.
The main concern dominating markets recently is when the Fed will begin ‘tapering’ its asset purchases. Any hint in the Fed minutes this Wednesday could cause large volatility in the dollar.
U.S. housing data will also be closely watched this week. Economists expect a rise in existing home sales for July but a pullback in new home sales after a jump in June.
In the meantime, traders in Asia were uncertain which direction to take, causing USDJPY to swing from highs of 97.84 and lows of 97.34 yen.
Disappointing Japan trade data contributed to the yen’s volatility today as the Nikkei moved back and forth from negative to positive territory.
The euro remained stable against the U.S. dollar, supported by a recent run of solid European economic data. Last week’s upbeat European GDP numbers and strong German ZEW Economic Sentiment gave the single currency a much needed boost.
EURUSD hit as high as $1.3379 last Friday and traded within a range of $1.3320 and $1.3342 today.
Sterling remained steady near Friday’s levels, with GBPUSD trading a tight range of $1.5617 and $1.5638.
AUDUSD opened at $0.91884 and rose to a session high of $0.9232, the highest since July 29. The Aussie is mostly benefiting from a broadly weaker U.S. dollar which was hurt on Friday when consumer confidence data disappointed.
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