Market Review – 26/10/2015 22:56GMT The single currency turned higher against the greenback on Monday as investors took a breather following a fall to a fresh two-and-a-half month low, while a bigger-than-expected drop in U.S. new home helped to push euro higher. During the day, although euro remained under pressure versus U.S. dollar ahead of Asian open and extended the last Friday’s selloff to a fresh two-and-a-half month trough at 1.0989 (Reuters), short-covering lifted price to 1.1040 in Asia and then higher to 1.1056 in European morning before selling interest in euro crosses (versus yen and pound) pressuring price down to 1.1004 in early New York session. Later, release of disappointing U.S. new home sales pushed price higher again to a fresh session high of 1.1068 before retreating. Reuters news reported on Monday, new U.S. single-family home sales fell to near a one-year low in September after two straight months of gains, suggesting a temporary cooling in the market for new houses. The Commerce Department said on Monday sales dropped 11.5 percent to a seasonally adjusted annual rate of 468,000 units, the lowest level since November 2014. August’s sales pace was revised down to 529,000 units from the previously reported 552,000 units. Economists forecast new home sales slipping to only a rate of 550,000 units. Sales were up 2.0 percent compared to September of last year. On the data front, the Ifo Institute for Economic Research showed Germany’s Ifo business climate fell less-than-expected last month. The institute said its index of German business climate fell to 108.2 in October, from 108.5 in the preceding month. Ifo economist said following the data, ‘German auto industry looks to be unfazed by Volkswagen scandal; German economy is overall showing itself to be very resilient; the domestic economy is the driving force; emerging markets and us economy are dampening export expectations; no effects from monetary policy from Fed and ECB are noticeable on Ifo index; influx of refugees has had hardly any affect until now on Ifo index.’ Versus the Japanese yen, U.S. dollar came under renewed selling pressure after a brief rise to 121.57 ahead of Asian open and fell to 120.78 in European morning. Later, the pair recovered to 121.15 but only to fall to a fresh session low of 120.60 in New York morning due to broad-based weakness in the greenback followed the release of downbeat U.S. new home sales data before recovering. Elsewhere, the British pound rebounded after marginal fall below Friday’s low at 1.5307 to 1.5305 ahead of Asian open and climbed to 1.5350 in European morning. Later, cable found renewed buying interest at 1.5324 in New York morning and jumped to a fresh session high of 1.5383, then moved sideways in New York afternoon. In European session, Confederation of British Industry said that CBI industrial trends orders in U.K. fell to -18 in October, from -7 in the preceding month. Market had expected CBI industrial trends orders to fall to -8 last month. In other news, European Commission Vice President Valdis Dombrovski said on Monday during a visit to Athens, ‘Greece on the right track of cooperation with EU; lots has been done in short time frame on reforms; successful completion of first bailout review will help return confidence; EU stands by Greek authorities in reform efforts; discussions ensured there will be no liquidity constraint on Greek budget on EU funds; there are differences of views on non-performing loans; there is a will to reach compromise on non-performing loans; Greece can propose alternatives to education tax; willing to find additional financing to assist Greece on refugee crisis.’ Data to be released on Tuesday: New Zealand trade balance, Switzerland UBS consumption indicator, UK GDP (prelim), U.S. durable goods orders, Redbook, building permits (revised) and consumer confidence.
Euro recovers on short covering after weak U.S. housing data
Euro recovers on short covering after weak U.S. housing data: Oct 27, 2015
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