One Stop Centre of Financial Market Trading blog

Previous session overview

The euro declined against the dollar and the yen in Asia Friday as falls in regional equities prompted short-term investors to sell the common currency to lock in profits on its recent rises.

At 0450 GMT, the euro was at USD1.4041, down from USD1.4077 late Thursday in New York. It stood at JPY114.16 against the yen, down from JPY114.74.

The declines came as Japan's benchmark Nikkei Stock Average was down 0.96% and Hong Kong's Hang Seng Index was off 0.44%.

Meanwhile, the dollar traded at JPY81.30 at 0450 GMT, down from JPY81.51 late Thursday in New York.

Investors recently have been selling the dollar and buying higher-yielding units like the euro on expectations that the Federal Reserve's policy-setting Open Market Committee will introduce a second round of quantitative easing at its next meeting Nov. 2-3.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, including the euro, was up at 76.666 at 0450 GMT from 76.563 late Thursday in New York.

The Pound rebounded on the back of a broadly weaker dollar, The GBP traded with a low of USD1.5886 and a high of USD1.6066 before closing the day at USD1.6005.

The Australian dollar also retreated against the U.S. dollar Friday after rising near parity to its highest level since it was floated in 1983. The Australian currency was down as investors sold it to lock in profits ahead of a speech by Fed Chairman Ben Bernanke in Boston slated for 1215 GMT.

Market expectation

The euro's failure to build on its rise to a near nine-month high against the dollar Thursday prompted some dealers to say expectations for more monetary easing in the U.S. may now be largely priced into the market.

Investors remain on alert for any more Japanese government intervention, particularly since the dollar fell to a fresh 15-year low at JPY80.88 Thursday. The Ministry of Finance dumped an estimated JPY2 trillion on Sept. 15 to weaken the yen, its first foray into currency markets in more than six years.

Investors will be listening closely Friday to Federal Reserve Chairman Ben Bernanke's speech at a conference in Boston for clues on the timing and extent of any further quantitative easing measures. Any hints that asset-purchase programs might not be as extensive as once thought would support the greenback, said analysts.

Sterling is likely to consolidate after setting an eight-month high of USD1.6067 yesterday, with negative dollar sentiment providing support. Still, the pound's topside is likely limited by negative domestic UK concerns. Against the euro, sterling is seen in ranges.

European stocks are expected to open tentatively higher Friday, bolstered by reasonable U.S. earnings news, but with some investors unwilling to push the indexes significantly higher without more compelling signs of economic growth.

Oct 15	Count.	Event	For	Unit	Imp.	Act.	Cons.	Prev.
00:00	US	US Treasury semi-annual currency report released
00:00	SE	Deputy Governor Ekholm participates in the ELSNIT conference in Paris
00:00	EU	ECB President Trichet speaks at World Policy Conference
00:00	WLD	World Policy Conference on Global Governance
00:00	JP	BoJ Governor Shirakawa speaks at Credit Association meeting
04:30	JP	Industrial Production (Final)	Aug	% m/m				-0.3
04:30	JP	Industrial Production (Final)	Aug	% y/y				15.4
04:30	JP	Capacity Utilisation	Aug	% m/m				-0.3
07:30	SE	Average house prices	Sep	% y/y				6
08:00	IT	Total Trade balance	Aug	EUR mn				-395
08:00	IT	EU Trade balance	Aug	EUR mn				-100
08:00	AT	CPI	Sep	%y/y				1.7
08:00	AT	CPI	Sep	% m/m				0.2
08:45	EU	ECB Executive Board member Bini Smaghi attends the Aspen Institute International Board Meeting
08:45	EU	ECB Executive Board member Stark speaks at a conference on taxes
09:00	IT	CPI (Final)	Sep	% m/m			-0.2	-0.2
09:00	IT	CPI (Final)	Sep	% y/y			1.6	1.6
09:00	EU	Trade balance (sa)	Aug	EUR bn			-0.8	-0.2
09:00	EU	Trade balance (nsa)	Aug	EUR bn				6.7
09:00	EU	HICP - Core (Final)	Sep	% y/y			1	1
09:00	EU	HICP (Final)	Sep	% m/m			0.2	0.2
09:00	EU	HICP (Final)	Sep	% y/y			1.8	1.6
12:00	US	Federal Reserve Bank of Atlanta President Lockhart participates in a Q&A session on the economy
12:10	EU	EU Economic and Monetary Commissioner Rehn gives speech at the European Liberal Democrats conference
12:15	US	Federal Reserve Chairman Bernanke gives speech at Boston Fed Conference
12:30	CA	Motor Vehicle Sales	Aug	% m/m			-5	2.4
12:30	CA	Manufacturing sales	Aug	% m/m			0.5	-0.9
13:00	BE	Trade Balance	Jul	EUR mn				316.8
13:30	US	CPI	Sept	% m/m			0.2	0.3
13:30	US	CPI ex food and energy	Sept	% m/m			0.1
13:30	US	Empire State Survey	Oct	index			6	4.1
13:30	US	Retail Sales	Sept	% m/m			0.3	0.4
13:30	US	Retail Sales Ex Autos	Sept	% m/m			0.3	0.6
13:55	US	Univ of Mich Sent. (P)	Oct	index			69	68.2
14:00	US	Business inventories	Aug	% m/m			0.5	1
15:00	FR	President Sarkozy holds a press conference
15:30	US	Federal Reserve Bank of San Fransisco research director Williams gives speech on "Have we underestimated the probability of hitting the zero lower bound?"
18:00	US	Budget	Sep	$ bn			-32	-46.6