Hope of improved Chinese manufacturing figures causes dollar weakness as Spain delays call for bailout
31/Οκτ/2012 • Currency Updates•
The dollar weakened versus most of its 16 major peers on speculation reports tomorrow will show improvement in Chinese manufacturing, brightening the global economic outlook and dampening demand for haven assets. It fell 0.4 percent against the euro, which was the dollar’s biggest drop since Oct 17. After hurricane Sandy halted fixed income trading, we should see this reopen under recommendation by the Securities Industry and Financial Markets Association.
The euro stumbled again as debt related concerns weighed down the shared currency. Bailout concerns dominated euro flows, as Spain remain reluctant to file for a bailout. Meanwhile, Greece is doing its best to avoid having to adhere to any additional austerity measures as it awaits the next round of bailout funds. We have some second tier data coming in shortly; the German unemployment change report is projected to show that 10,000 lost their jobs this month. If this data comes out worse than expected it may drag the euro down for the sixth consecutive day.
We saw sterling strengthen against the dollar yesterday. Although the CBI realized sales report revealed a huge upside surprise, a reading of 30 which was 4 times the expected reading, the markets were barely affected by its results and price action pairs were hardly affected. In other news, the GfK consumer confidence report which was published just a few hours ago, printed a reading of -30, which is slightly lower than the -28 reading that many were expecting to see. This does not come as good news for a country who is supposedly crawling out of recession.