Market Review – 24/06/2010 21:45 GMTDollar falls against euro and yen on Fed’s cautious US outlookThe greenback remained under pressure versus the Japanese yen on Thursday as traders sold the pair after Fed turned cautious on U.S. recovery following the FOMC rate decision on Wednesday. Despite brief rise to 89.98 in Australia, the pair fell to 89.22 in NY mid-day before staging a strong rebound to 89.71 as an auction of U.S. Treasury 7-year notes was met with solid demand. The usd/jpy pair eventually ended the day in decline though.
In other news, durable goods fell by 1.1% versus the forecast of decrease of 1.4%. U.S. jobless claims which fell to 457,000 from 476,000.
Although euro has fallen sharply from Asian high of 1.2353 to 1.2261 on renewed cross selling versus yen and sterling , the pair rebounded strongly from there and picked up more momentum after triggering stops above 1.2350/55 before rallying to 1.2388 in NY mid-day on active short-covering in euro as eur/gbp rebounded strongly from a fresh 2010 low of 0.8180. Euro then retreated from said intra-day high due to weakness in US stocks and ended the day up. DJI was dragged down by financials and ended the day down by 1.41% at 10152.80. Earlier, euro was pressured after the spreads of eurozone bonds widened and the cost of protecting Greek debt against default hit a record high.
On economic front, eurozone industrial production data in April came in at 0.9% m/m and 22.1% y/y versus the expectation of 1.6% m/m and 21.5% y/y.
The British pound traded with a firm undertone in Asia and Europe. Although cable retreated to 1.4932 in European morning, sterling subsequently rebounded and rose to 1.5012 in European mid-day due to the generally supportive response to the U.K. budget from rating agencies together with cross-buying in pound as eur/gbp fell to a fresh one year low of 0.8180 before rebounding strongly. Cable then retreated from said high fell to as low as 1.4916 in NY afternoon.
Economic data to be released on Friday include: New Zealand Trade balance , Japan CPI, U.S. PCE , GDP and 2010 G8 / G20 Summit.
