Market Review - 23/06/2014 22:48GMT

Dollar remains little changed versus majors currencies after upbeat U.S. data

The greenback ended the day little changed versus majority of its peers except the Japanese yen on Monday despite the release of better-than-expected U.S. manufacturing PMI and existing home sales.

U.S. manufacturing PMI came in better-than-expected at 57.5 vs forecast of 56.5. Existing home sales rose by 4.9%, higher than expectation of 1.9%.

Although the single currency rose to session high at 1.3614 at European open, the release of weaker-than-expected PMIs from France, Germany and Eurozone pressured the pair lower and price dropped to an intra-day low at 1.3574 in European morning. Euro pared some of its losses and recovered to 1.3603 at New York open, however, renewed selling after the release of upbeat U.S. manufacturing PMI and existing home sales pushed the pair back down to 1.3581 before stabilizing.

France manufacturing and services PMI came in at 47.8 and 48.2 vs forecasts of 49.5 and 49.4 respectively. Germany manufacturing and services PMI was reported weaker-than-expected at 52.4 and 54.8 vs forecasts of 52.5 and 55.7 respectively. EZ manufacturing and services PMI came in at 51.9 and 52.8, lower than expectations of 52.2 and 53.3 respectively.

Versus the Japanese yen, the greenback retreated from session high at 102.14 at Asian open to 101.82 in European morning on active cross-buying of yen together with risk aversion on continued geopolitical tension in Iraq. However, the greenback pared its losses and recovered to 101.94 in New York morning on dollar's weakness following upbeat U.S. data.

The British pound also rose in tandem with euro to 1.7050 at European open, however, renewed selling below last Thursday's 5-1/2 year high at 1.7064 capped intra-day gains there and price retreated to 1.7002 at New York open. Later, cable recovered to 1.7020 in New York afternoon on dollar's strength.

In other news, ECB's Nowotny said 'Eurozone economic rebound relatively weak; big danger is that costs of crisis not only fiscal but that potential growth rates limited; Germany increasingly becoming Europe's growth enginge.'

Data to be released on Tuesday:

Switzerland trade balance, Germany Ifo business climate, Ifo current conditions, Ifo expectations, UK mortgage approvals, U.S. consumer confidence, new home sales.