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The greenback remained on the back foot in Asia and Europe on improved risk sentiment due to rise in European stocks and later pared intra-day losses in New York on rally in U.S. Treasury yields as well as short-covering.
Versus the Japanese yen, although dollar moved sideways in Asia, price fell from 105.69 at European open to session lows of 105.25 on usd’s continued weakness before staging a rebound to 105.66 in New York as rise in U.S. Treasury yields
triggered short covering. Price last traded at 105.43 near the close.
The single currency extended its rise from Thursday and gained to 1.2098 at Asian open. Despite retreating to 1.2083, the pair later rallied to session highs of 1.2144 in Europe on upbeat French and German manufacturing PMI data together with usd’s weakness before retreating to 1.2108 in New York on profit-taking.
Reuters reported Germany IHS Markit’s flash purchasing managers’ index (PMI) of activity in the manufacturing sector shot up to 60.6 from 57.1 in January, beating a forecast for fall to 56.5.
Although the British pound retreated from 1.3978 in Australia to 1.3952 in Asia, cable later rallied to a fresh 33-month high of 1.4036 at New York open on usd’s broad-based weakness as well as cross-buying in sterling before easing to 1.4002 due to profit-taking.
Reuters reported the UK IHS Markit/CIPS flash composite Purchasing Managers’ Index (PMI) jumped to 49.8 in February from 41.2 in January, a much sharper improvement than had been expected by any of the economists polled by Reuters.
In other news, Reuters reported the Bank of England might need to cut interest rates below zero later this year or in 2022 if the economic recovery disappoints, and especially if there is persistent unemployment, policymaker Gertjan Vlieghe said on Friday. Vlieghe said his central scenario was that the BoE would not need to loosen policy if the recovery took place as forecast by the central bank earlier this month, but that there was a risk of lasting labour market weakness depressing wages and prices.
Data to be released this week :
Germany Ifo business climate, Ifo current conditions, Ifo expectations, and U.S. national activity index, leading index change, Dallas Fed manufacturing business index on Monday.
New Zealand retail sales ex-autos, retail sales, Japan market holiday, China house prices, UK claimant count, ILO unemployment rate, employment change, average weekly earnings, CBI distributive trades, Swiss producer and import price index, Italy industrial orders, industrial sales, EU HICP, core HICP, and U.S. redbook, monthly home price, Case-Shiller home price, consumer confidence, Richmond Fed manufacturing index on Tuesday.
UK BRC shop price index, Australia construction work down, wage price index, New Zealand RBNZ interest rate decision, Germany GDP, France business climate, Swiss investor sentiment, and U.S. MBA mortgage applications, building permits, new home sales on Wednesday.
Australia capital expenditure, building capex, New Zealand NBNZ business outlook, NBNZ own activity, Japan coincident index, leading economic index, Germany GfK consumer sentiment, France consumer confidence, Italy business confidence, consumer confidence, EU business climate, economic sentiment, industrial sentiment, services sentiment, consumer confidence, and U.S. durable goods, durables ex-transportation, durables ex-defense, GDP, GDP deflator, core PCE price index, PCE price index, initial jobless claims, continued jobless claims, average weekly earnings, pending home sales, KC Fed manufacturing index on Thursday.
New Zealand imports, trade balance, exports, Japan Tokyo core CPI, Tokyo CPI, industrial output, retail sales, construction orders, housing starts, Germany import prices, UK nationwide house price, Swiss non-farm payrolls, GDP, KOF indicator, France consumer spending, GDP, CPI (EU norm), CPI, Italy trade balance, producer prices, U.S. personal income, personal spending, core PCE price index, PCE price index, trade balance, wholesale inventories, Chicago PMI, University of Michigan sentiment, and Canada producer prices, budget balance on Friday.