Dollar Shows Mixed Trading Against Majors
Tuesday, the U.S. dollar showed mixed trading against its major counterparts as investors awaited fresh leads from the equity market as well as more economic data to gauge the pace of the global economic recovery.
While the dollar declined against the yen and the pound, it recouped its Asian session losses against the euro and the franc.
On the equity front. Asian stocks retreated today, following losses on Wall Street overnight amid rising concerns the markets have gotten ahead of economic realities.
In Japan, the benchmark Nikkei 225 stock index lost 1.5 percent, or 150.16 points, to 10,212.46 points. Hong Kong’s market, which was closed Monday, dropped 420.14, or 1.9 percent, to 22,169.59.
China’s Shanghai market led Asia’s declines, tumbling 88.11, or 2.8 percent, to 3,021.46. Australia’s market lost 1.6 percent and India’s Sensex was 2 percent lower.
South Korea’s Kospi shed 0.5 percent to 1,649.53 a day after new figures showed the country’s economy, Asia’s fourth largest, expanded at its quickest pace in seven years in the last quarter.
However, the European markets gained modestly today. As trading opened in Europe, markets in Britain, Germany and France were higher by about 0.2 percent each as BP PLC, the continent’s second-largest oil company, said third-quarter profit fell less than expected — to $5.3 billion from $8 billion a year earlier.
Oil prices lingered below $79 a barrel today after three days of losses as investors eyed a volatile U.S. dollar. U.S. crude for December delivery edged up 10 cents to $78.78 a barrel at 2:14 am ET, after settling down $1.82 at $78.68 on Monday.
London Brent crude was up 10 cents at $77.36.
The dollar fell to 1.4929 against the euro and 1.0152 against the franc at 2:55 am ET Tuesday. Thereafter, the dollar bounced back and it is currently trading near yesterday’s close of 1.4872 against the euro and 1.0187 against the franc. If the dollar advances further, it may target 1.035 against the franc and 1.448 against the euro.
The European Central Bank said today that the Euro-zone M3 money supply growth slowed to 1.8% year-on-year in September from 2.6% in August. Economists had expected the money supply to rise 2.2%.
The dollar that closed yesterday’s trading at 1.6325 against the pound slipped to a 4-day low of 1.6402 in early deals on Tuesday. The next downside target level for the U.S. currency is seen at 1.669.
During early trading on Tuesday, the dollar weakened against the yen. At 4:40 am ET, the dollar-yen pair touched 91.84, down from yesterday’s close of 92.19. If the pair drops further, 91.6 is seen as the next target level.
Today, the Ministry of Finance raised Japan’s economic assessment for the second consecutive quarter. The ministry upgraded its evaluations for seven of the 11 regions. At the same time, it maintained the assessment of four regions from the previous quarter.
Despite difficult situation, the economy showed some signs of picking up, such as an increase in manufacturing activity, the ministry said in a report for three months ended September. But, the ministry retained its pessimistic assessment of employment conditions for all 11 regions.
Looking ahead, the Confederation of British Industry is set to release October’s Distributive Trade survey results at 7:00 am ET. Last month, the balance between retailers who reported an increase in sales against those who reported a decrease in sales stood at 3%.
From the U.S., the S&P/Case-Shiller home price index is scheduled to be released at 9 am ET. Economists expect an 11.90% year-over-year decline in the 20-city composite house price index for August.
At 10:00 am ET, the Conference Board is scheduled to release its consumer confidence report for October. The report is expected to show that the consumer confidence index rose to 53.5 in October.
