European Session – Dollar remains weak, focus turns to Bernanke speech
January 3, 2014 2:38 pm
Risk aversion dominated the currency markets as investors remained cautious ahead of the weekend. Trading volumes remain thin as markets are slowly trying to get into swing after the holidays.
After yesterday’s negative start to the New Year, leading to a tumble in the dollar against the yen, and the euro sliding against the dollar, markets were calmer today and most currency pairs consolidated yesterday’s moves.
There was little in terms of major economic data releases today. Apart from China service sector PMI, which disappointed, today’s European data included Euro zone money supply and Italian CPI readings, which were soft.
The euro extended its slide from Thursday, ending the European session 0.12 % lower against the dollar at 1.3636. The euro was also weak against the yen, maintaining losses from its drop yesterday, and hovered close to the 142.00 level at two week lows. The pair however entered the US session on a bounce to 142.93, up 0.36%.
Sterling was briefly boosted by better-than-expected UK housing data. Mortgage approvals reached their highest since January 2008. UK Construction PMI beat forecasts to rise to 62.1 in December versus 62.0 expected, though the previous reading was 62.6.
The pound rose to an early European session high of 1.6473 before retreating back down to end the session with a 0.12% loss at 1.6415.
The yen stayed broadly stronger, although it gave up some gains to let the dollar end with a 0.17% gain at 104.44. Yesterday the dollar took a big hit against the yen, to drop to 104.06 by the Asian session today. The slightly better-than-expected US manufacturing ISM data yesterday did not succeed in giving the dollar a boost.
US auto sales data are due to be released in the US session later today. These will be closely watched, as will be Federal Reserve Chief Ben Bernanke’s speech at a conference in Philadelphia today. Other Fed officials are also scheduled to speak, including Plosser and Stein. However, the winter storm hitting the US northeast may mean traders will not be able to get to their desks and trading volumes could be thin, resulting in a quiet session.
Risk aversion dominated the currency markets as investors remained cautious ahead of the weekend. Trading volumes remain thin as markets are slowly trying to get into swing after the holidays.
After yesterday’s negative start to the New Year, leading to a tumble in the dollar against the yen, and the euro sliding against the dollar, markets were calmer today and most currency pairs consolidated yesterday’s moves.
There was little in terms of major economic data releases today. Apart from China service sector PMI, which disappointed, today’s European data included Euro zone money supply and Italian CPI readings, which were soft.
The euro extended its slide from Thursday, ending the European session 0.12 % lower against the dollar at 1.3636. The euro was also weak against the yen, maintaining losses from its drop yesterday, and hovered close to the 142.00 level at two week lows. The pair however entered the US session on a bounce to 142.93, up 0.36%.
Sterling was briefly boosted by better-than-expected UK housing data. Mortgage approvals reached their highest since January 2008. UK Construction PMI beat forecasts to rise to 62.1 in December versus 62.0 expected, though the previous reading was 62.6.
The pound rose to an early European session high of 1.6473 before retreating back down to end the session with a 0.12% loss at 1.6415.
The yen stayed broadly stronger, although it gave up some gains to let the dollar end with a 0.17% gain at 104.44. Yesterday the dollar took a big hit against the yen, to drop to 104.06 by the Asian session today. The slightly better-than-expected US manufacturing ISM data yesterday did not succeed in giving the dollar a boost.
US auto sales data are due to be released in the US session later today. These will be closely watched, as will be Federal Reserve Chief Ben Bernanke’s speech at a conference in Philadelphia today. Other Fed officials are also scheduled to speak, including Plosser and Stein. However, the winter storm hitting the US northeast may mean traders will not be able to get to their desks and trading volumes could be thin, resulting in a quiet session.
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