Market Review – 27/02/2011 23:27 GMT
Euro retreats fm 3-week high on long liquidations ahead of weekend
The euro initially extended recent ascent to a fresh 3-week high of 1.3839 in Asian morning after continued hawkish rhetoric fm ECB officials earlier this week. However, intra-day selloff in cable dragged the single currency lower in European session n despite the knee-jerk reaction after the release of lower-than-expected U.S. 2010 Q4 GDP data, price later weakened to an intra-day low of 1.3724 on broad- based long liquidations in NY moring b4 recovering.
U.S. 2010 Q4 GDP came in at 2.8% versus economists’ forecast of 3.3%. n U.S. Q4 GDP deflator rose by 0.4% compared to the street expectation of 0.3%.
Although the British pound continued to rise fm previous session’s low of 1.6085 to 1.6161 in Asia, cable then tanked after U.K. 2010 Q4 GDP shrank more than anticipated. The pound eventually fell to an intra-day low of 1.6030 in NY morning b4 recovering on short-covering ahead of weekend. Cross-selling in sterling versus euro n jpy also weighed on the pair as eur/gbp rose to a fresh 3-week high of 0.8594 b4 retreating n gbp/jpy also tumbled fm 132.46 to 131.13.
Revised official data showed the U.K. economy shrank at 0.6% in the last quarter of 2010, more than the preliminary reading of a 0.5% contraction, as the downgrade was mainly due to lower production n services output than it had estimated last month. The snow-related disruption still remained, subtracting 0.5% points of decline.
Canadian dollar strengthened to a near 3-year high of 0.9780 against the greenback on Friday, underpinned by recent high oil prices.
Data to be released next week include :
New Zealand export/import data, trade balance, Japan industrial production, retail sales, housing starts, construction, Germany import price index, eurozone HICP, U.S. personal income, personal spending, PCE index, Canada GDP, current account, Chicago PMI n pending home sales on Monday.
Japan household spending, unemployment rate, Australia retail sales, current account, RBA rate decision, Swiss GDP n PMI, U.K. nationwide house price index, Germany unemployment rate n unemployment changes, eurozone manufacturing PMI, HICP flash data n unemployment rate, U.K. manufacturing n mortgage approval, Canada BoC rate decision, U.S. construction spending n ISM manufacturing on Tuesday.
Japan business capex, Australia GDP, Germany retail sales, U.K. PMI construction, eurozone PPI, U.S. ADP employment n Canada PPI on Wednesday.
Australia building approvals, Swiss retail sales, Germany, U.K. n eurozone services PMI, eurozone GDP, retail sales, ECB rate decision, U.S. jobless claims, productivity n ISM non-manufacturing on Thursday.
U.S. average hourly earnings, non-farm payrolls, unemployment rate n factory orders on Friday.