Market Review - 29/10/2013 21:46GMT

Dollar strengthens broadly ahead of FOMC

U.S. dollar strengthened broadly against major currencies on Tuesday as investors awaiting the outcome of Wednesday's FOMC policy meeting that the Federal Reserve will maintain its bond-buying program in coming months.

The single currency traded narrowly in Asia on Tuesday and fell to 1.3754 in European morning. Euro then staged a brief but strong rebound to 1.3813 in New York morning on euro-positive comments from ECBs Nowotny. However, renewed selling interest together with active profit-taking capped euro's upside. The pair then tanked to 1.3736 in New York afternoon.

ECB's Governing Council member Ewald Nowotny says 'ECB unlikely to cut benchmark or deposit rate; policy makes 'have to live with' strong euro; "no realistic prospect" of rate cut.'

Versus Japanese yen, although the greenback initially dropped to 97.46 in Asia before ratcheting higher in Europe. Dollar rose above Monday's high at 97.79 to 98.00 in New York morning and climbed further to an intra-day high of 98.28 in New York afternoon.

The British pound tumbled to 1.6063 at Asian open before rebounding to 1.6119 ahead of European open. Cable later edged lower in European session and then fell to 1.6056 in New York morning. Sterling dropped further to a session low at 1.6022 in New York afternoon.

In other news, EU's Olli Rehn says 'Europe economic reform must continue for stronger growth; "clearly premature" to declare Europe's crisis over; tight credit conditions holding back European growth; "we paid dearly" for bank supervision deficiencies; see "some improvement" in Ireland's job market; clearer Fed policy outlook would benefit global economy.'

On the data front, U.S. retail sales in September came in at -0.1% m/m, weaker than the forecast of 0.1%. U.S. producer price index in September came in at -0.1% m/m and 0.3% y/y, lower than the expectation of 0.2% n 0.6% respectively. U.S. consumer confidence in October came in at 71.2, weaker than the forecast of 75.0, previous reading was revised to 80.2.

Data to be released on Wednesday:

Japan industrial production, Swiss UBS consumption indicator, KOF indicator, Germany unemployment change, unemployment rate, HICP, CPI, U.K. Lloyds business barometer, EU business climate, Economic sentiment, consumer confidence, U.S. ADP employment, CPI and Fed FOMC rate decision.