Market Review – 28/02/2011 19:49 GMT
Euro n cable rise on speculation Fed’s Bernanke continues stimulative policy
The euro rose on Monday on speculation the Federal Reserve Chairman Ben Bernanke would iterate his supportive stance on the stimulative policy in his testimony at Senate on Tuesday n Wednesday. Despite the initial brief fall below last Friday’s low of 1.3724 in Asian morning, buying interest at 1.3712 lifted euro up n the single currency eventually climbed to 1.3857 b4 retreating on active crossing selling especially vs sterling. Eur/gbp fell fm 0.8555 to 0.8480, eur/jpy dropped fm 113.35 to 112.80 while eur/chf declined fm 1.2861 to 1.2805.
The British pound rallied broadly on Monday as the market again speculated that the Bank of England will be pressured to raise interest rate earlier than the ECB n the Fed due to recent high oil prices. Cable rose fm Asian low of 1.6072 to 1.6152 in European morning n despite staging a brief pullback later, price then rallied abv last Wednesday’s high of 1.6275 to as high as 1.6278 in NY afternoon b4 stabilising. Cross-buying in sterling versus euro n jpy also supported the pound as gbp/jpy rose sharply fm 131.31 to 133.32.
On the data front, eurozone final Jan. HICP came in lower-than-expected at 0.7% against a rise of 0.6% in the previous month, U.S. Personal income rose to 1.0% in Jan fm 0.4% in Dec. while Canada GDP in Dec. came out better-than-expected at 0.5% vs street forecast at 0.3% n the previous reading of 0.4%.
Irish election results over the weekend:
The Fine Gael beat the embattled Fianna Fail led by Brian Cowan, as expected, Enda Kenny’s party had secured 70 seats of the 153 seats filled so far n is widely expected to form a coalition with the Labour party which had won 35 seats.
Data to be released on Tuesday includes:
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.