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The greenback continued its recent winning streak and hit a 3-week high against majority of its peers on Friday as recent release of upbeat U.S. data triggered speculation the Federal Reserve may taper its asset purchases sooner rather than later together with a jump in U.S. Treasury yields.
Reuters reported U.S. consumer sentiment steadied in early September after plunging the month before to its lowest level in nearly a decade, but consumers continue to have a bleak view of the outlook amid a stiff bout of inflation, a survey showed on Friday. The University of Michigan said its consumer sentiment index edged up to 71 in the first half of September from 70.3 in August – the lowest since December 2011. Economists polled by Reuters had forecast a reading of 72. Assessments of current conditions slipped further, to 77.1 from 78.5 in August, while the survey’s forward-looking expectations index ticked up to 67.1 from 65.1, which had been the lowest since 2013.
Versus the Japanese yen, dollar jumped from 109.67 to 109.91 in Asian morning on broad-based selling in yen. The pair continued to ratchet higher in tandem with U.S. yields and rose to session highs of 110.07 in New York morning before easing on profit-taking due to active cross-buying in yen.
The single currency found renewed buying at 1.1759 in Asian morning and gained to 1.1785 in early European morning on cross-buying of euro especially vs sterling. The pair then rose to session highs at 1.1788 ahead of New York open but only to tumble to a 3-1/2 week low of 1.1725 at New York close on usd’s broad-based strength.
The British pound met renewed selling at 1.3799 at Asian open and retreated to 1.3784 in Asian morning before rebounding to 1.3810 ahead of European open. The pair then fell on the back of downbeat UK retail sales data to 1.3805. Despite rebounding briefly to 1.3812 in European morning, price dropped to session lows at 1.3727 at New York close due partly to cross-selling of sterling especially vs euro.
News from Reuters on British retail sales volumes fell 0.9% last month to stand unchanged from a year earlier, the Office for National Statistics said on Friday. Economists polled had forecast on average that sales volumes would rise 0.5% on the month in August and show annual growth of 2.7%. On the data front, they reported euro zone inflation accelerated to a 10-year high in August, the European Union’s statistics office confirmed on Friday, as a global recovery pushed energy prices even higher. Eurostat said consumer prices in the 19-nation bloc rose 3.0% in August year-on-year, after a 2.2% rise in July, confirming its earlier estimates released on Aug. 31. It was the highest rate since November 2011. Month-on-month inflation in the bloc rose 0.4%, also in line with Eurostat’s initial estimate.
Data to be released this week :
New Zealand Westpac consumer survey, U.K. Rightmove house price, Japan market holiday, China market holiday, Germany producer prices and U.S. NAHB housing market index on Monday.
China market holiday, U.K. PSNB, PSNCR, Swiss trade balance, exports, imports, U.K. CBI trends orders, U.S. current account, building permits, hosing starts, redbook, Canada new housing price index and New Zealand GDT price index on Tuesday.
Australia Westpac leading index, Japan BoJ interest rate decision, Italy industrial sales, producer prices, EU consumer confidence, U.S. MBA mortgage application, existing home sales and Fed interest rate decision on Wednesday.
Australia manufacturing PMI, services PMI, Japan market holiday, France Markit manufacturing PMI, Markit services PMI, Swiss SNB rate decision, Germany Markit manufacturing PMI, Markit services PMI, EU Markit manufacturing PMI, Markit services PMI, U.K. Markit manufacturing PMI, Markit services PMI, BoE interest rate decision, asset purchase program, BoE QE total, BoE QE corporate bond purchases, BoE MPC vote hike, BoE MPC vote unchanged, BoE MPV vote cut, U.S. initial jobless claims, continuing jobless claims, Markit manufacturing PMI, Markit services PMI, Leading index change, KC Fed manufacturing and Canada retail sales on Thursday.
New Zealand imports, exports and trade balance, UK Gfx consumer confidence, Japan’s nationwide CPI, mfg PMI, Italy’s business and consumer confidence, Germany’s Ifo data, U.S. building permits, news home sales and Canada’s budget balance.