The greenback continued to fall broadly against its major counterparts on Tuesday as investors’ hopes on global economic recovery remained and kept purchasing risky assets. High-yielding currencies like euro, aussie and kiwi reached fresh highs of 2009, while gold rallied above $1000 an ounce and oil rose above $70 a barrel.
After Monday’s sideways trading on U.S. and Canada holiday, the single currency continued to trade narrowly in Asia session. However, price rallied in European morning after the release of German trade balance and export data (both turned out to be better than expected) and breached last months high of 1.4448. Despite the release of weak German industrial production data afterwards, euro rose again in U.S. session to as high as 1.4535 before retreat.
Similar to euro, cable started its rally in European morning in line with the greenback’s broad-based selloff and the release of stronger-than-expected U.K. industrial and manufacturing production data (industrial production in July came out as 0.5% and -9.3% respectively, beat the forecast of 0.2% and –10.1% while manufacturing data came out as 0.9% and –10.1%, better than 0.3% and –11.1% in forecast), price gained to as high as 1.6590 in U.S. afternoon before retreat due to profit-taking.
Gold rose above $1000 level an ounce to as high as 1006.90 while oil rallied above $70 a barrel on market optimism on economic recovery, which boosted the purchasing on risky assets (stock markets also showed gains).
Commodity currencies also strengthened on the back of rising equities and gold as well as oil. Australian dollar, kiwi rose to as high as 0.8658 and 0.6985 respectively against the dollar while the lonnie appreciated to 1.0674 before retreat took place in late N.Y. session.
Economic data to be released on Wednesday include:
Nationwide consumer confidence in U.K.; Westpac consumer confidence and retail sales in Australia; leading indicators and machine tools orders in Japan; CPI and HICP in Germany; trade balance in U.K. and; housing starts in Canada.