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Market Review – 30/11/2019 02:03GMT
Dollar ends lower on broad-based selling due to month-end rebalancing
Despite initial rise versus its major counterparts in early New York trading, the greenback erased intra-day gains on month-end flows and later ended the day lower in tandem with falling U.S. treasury yields against its G7 peers in relatively thin market following Thursday’s Thanksgiving market holiday.
Versus the Japanese yen, although dollar briefly jumped to 109.59 at Asian open on cross-selling in jpy, price retreated to 109.46 in Asia. However, the pair later climbed to a fresh near 6-month high of 109.66 at New York open on usd’s strength but then erased intra-day gain due to broad-based weakness and later hit session lows of 109.41 on long liquidation in dollar.
The single currency went through a volatile session. Euro moved sideways in Asia before renewed selling emerged and knocked price down to a 1-1/2 month low at 1.0982 after tripping stops below 1.0990 at New York open on usd’s strength. However, the pair quickly erased its intra-day losses and rallied to session highs at 1.1028 short-covering due to usd’s weakness, price last traded near 1.1015 near the close.
Reuters reported euro zone consumer prices grew faster than expected in November, an official estimate showed on Friday, pushed up by a jump in food and services prices despite a slump in energy costs. The European Union’s statistics office Eurostat said consumer prices in the 19 countries sharing the euro rose by 1.0% on the year, accelerating from 0.7% in October. On the month, prices fell by 0.3% in November. Economists polled by Reuters had expected a 0.9% year-on-year gain.
The British pound went through a roller-coaster ride. Although cable recovered to 1.2923 in Asia, price fell to 1.2879 on stop selling in European morning due partly to cross-selling in sterling before rebounding to 1.2912 but only to retreat 1.2883 at New York open. However, the pair then regained traction and showed muted reaction to breaking news of a minor terror attack at London Bridge, London. Price later rallied to session highs of 1.2947 on month-end long usd liquidation and last traded at 1.2933 near the close.
In other news, Reuters then reported British Prime Minister Boris Johnson said on Friday that Britain would leave the European Union by Jan. 31 at the latest if his Conservative Party win a majority in the election in two weeks time. “If we can get a working majority then we will come on Jan. 31 at the absolute latest,” Johnson told LBC radio. He also repeated his message that he saw no reason why Britain would need to extend the transition period after Brexit beyond the end of 2020. Asked if he would rather be prime minister or have Britain leave the EU, he replied: “I would rather get us out of the EU. I can tell you that.”
Data to be released this week :
Australia AIG manufacturing index, building permits, business inventories, ANZ job advertisements, New Zealand terms of trade, import prices, export prices, Japan Jibun bank manufacturing PMI, China Caixin manufacturing PMI, Swiss retail sales, manufacturing PMI, Italy Markit manufacturing PMI, France Markit manufacturing PMI, Germany Markit manufacturing PMI, EU Markit manufacturing PMI, Canada Markit manufacturing PMI and U.S. Markit manufacturing PMI, constructions spending, ISM manufacturing PMI on Monday.
Australia current account, RBA interest rate decision, Swiss CPI, France budget balance, UK BRC retail sales, Markit construction PMI, EU producer prices, New Zealand GDT price index and U.S. redbook, ISM New York index on Tuesday.
Australia GDP, capital expenditure, Japan Jibun bank services PMI, China Caixin services PMI, Italy Markit services PMI, France Markit services PMI, Germany Markit services PMI, EU Markit services PMI, UK Markit services PMI, U.S. MBA mortgage application, ADP employment change, Markit services PMI, ISM non-manufacturing PMI and Canada labour productivity rate, BoC interest rate decision on Wednesday.
Australia retail sales, trade balance, imports, exports, Germany industrial orders, EU employment, GDP, retail sales, Canada trade balance, exports, imports, Ivey PMI and U.S. trade balance, initial jobless claims, Durables ex-defense , Durable goods, Durables ex-transport, factory orders on Thursday.
Australia AIG construction index, Japan all household spending, coincident index, leading indicator, Germany industrial output, France, current account, trade balance, imports, exports, UK Halifax house prices, Italy retail sales, U.S. non-farm payroll, private payrolls, unemployment rate, average earning, University of Michigan sentiment and Canada unemployment change, unemployment rate on Friday.