Daily Market Outlook by AceTrader

Market Review – 03/02/2010 22:56      All times in GMT   

Dollar gains broadly on upbeat U.S. economic data

U.S. currency rallied against most of its counterparts on lower-than-expected private sector job losses as well as stronger-than-expected economic data.

Despite dollar’s brief dip to 90.07 in Asian morning, it swiftly rebounded from there and picked up more upward momentum to 91.28 in New York morning as U.S. ADP employment decreased by 22,000 in January versus economists’ forecast of a decrease of 54,000 while U.S. ISM Non-manufacturing PMI data came at 50.5 in January as the highest since May 2008, rising from previous reading of 49.8 in December.The dollar eased from said high on profit taking later.  
Although the single currency maintained a firm undertone in European morning on speculation that the European Commission will endorse a Greek plan to cut its budget deficit below the EU ceiling of 3% of GDP by the end of 2012 together with the release of better-than-expected services PMI which came in at 52.5, compared to the consensus forecast of 52.3, euro retreated after the EU’s verdict and tumbled to a low of 1.3885 in New York on the better-than-expected U.S. ADP employment data as well as the rising U.S. ISM non-manufacturing PMI. Market’s worry that Portugal will be the next financially troubled country in the euro zone also weighed on the single currency.   
The British pound strengthened in Asian opening on the back of strong U.K. Nationwide consumer confidence index (73 versus economists’ forecast of 70) and rose to a high of 1.6070 in European morning before retreating strongly after the release of worse-than-expected U.K. services PMI index which dropped to 54.50 in January (expectation was 56.50) from 56.80 in December. Cable then extended the decline to as low as 1.5878 in New Zealand session.  
New Zealand tumbled from around 0.7088/90 to as low as 0.6965, its lowest in five months, after the release of surprising higher-than-expected unemployment rate at 7.3% in Q4 2009.  
Data to be released on Thursday include New Zealand employment change, Australia retail sales, Swiss trade balance, Germany factory orders, Germany factory orders, EU ECB rate decision, U.S. jobless claims, durable goods, factory orders, Canada building permits and Ivey PMI.