Acetrader-Daily Market Outlook 11-2-2011

Market Review – 10/02/2011 20:14 GMT

Euro tumbles on much lower-than-expected U.S. weekly jobless claims data

The dollar rallied broadly (except vs the British pound) on Thursday after U.S. weekly jobless claims fell to a 2-1/2 year low last week.

U.S. weekly jobless claims last week dropped to 383,000 versus the expectation of 410,000.   
In sharp contrast to the previous session, euro was under heavy selling pressure throughout the day in Asia, Europe and U.S. session on Thursday. Euro continued its intra-day decline in NY morning after the release of much lower-than-expected U.S. weekly jobless claims, the single currency eventually tumbled to a low of 1.3577 b4 recovering on short-covering. The pair was also weighed down by the lingering eurozone debt woes as Portugal is considered at risk of becoming the next eurozone periphery country to need a bailout. European leaders will meet next month to discuss bolstering a 440-billion euro fund.   
In the other news, sources quoted as saying that Bundesbank chief Axel Weber will meet German Chancellor Angela Merkel on Friday.   
The British pound ratcheted lower fm Asian high of 1.6111 n price was under pressure in European session on Thursday. Later, despite extending intra-day decline to 1.6011 in NY morning, cable then staged a strong rebound in NY mid-day to 1.6139 on active short-covering together with aggressive cross-buying in sterling, eur/gbp tumbled fm 0.8529 to 0.8444 n gbp/jpy rallied fm 132.54 to 134.26.  
BoE’s Monetary Policy Committee kept interest rate unchanged at 0.5% as widely expected and maintained its asset purchase program at 200 bln pounds.  
Versus the Japanese yen, the dollar maintained a biddish tone in Asian n European sessions on Thursday and intra-day upmove accelerated in NY morning. The greenback eventually climbed to a high of 83.37 b4 stabilising in late NY trading.   
Friday will be a holiday in Japan  
Data to be released on Friday:  
Germany CPI n WPI, U.K PPI, U.S. trade balance n University of Michigan consumer confidence survey, Canada trade balance n export/import data.