Forex - Pound hits 10-month highs vs. dollar

The pound rose to session highs against the dollar on Wednesday after revised data showed that the rate of growth in the U.K. economy in the third quarter was in line with preliminary estimates.

GBP/USD rose 0.37% to 1.6274, the highest level since January 2, up from 1.6213 on Tuesday.

Cable was likely to find support at 1.6175 and resistance at 1.6338, the high of January 2.

The Office for National Statistics said its second estimate of U.K. third-quarter gross domestic product was unchanged at 0.8% quarter-on-quarter, while the annual rate of growth was also unchanged at 1.5%. 
It was the fastest quarterly rate of growth in over three years.

The ONS said consumer spending rose by 0.8%, its fastest pace since the second quarter of 2010, while industrial output rose 0.6% on the quarter. Construction output was up 1.7%, less that the preliminary estimate.

Trade volumes remained thin ahead of the U.S. Thanksgiving holiday on Thursday.

The release of mixed U.S. economic data did little to shift expectations that the Federal Reserve will start to taper its stimulus program at one of its next few meetings.

Data released on Tuesday showed that U.S. consumer confidence unexpectedly fell to seven month low in November, but a separate report showed that the number of building permits issued in the U.S. rose to the highest level in five years in October.

The euro fell to session lows against sterling, with EUR/GBP sliding 0.13% to 0.8359.

The U.S. was to release reports on durable goods orders and manufacturing activity in the Chicago area later Wednesday, as well as the weekly report on initial jobless claims. The Labor Department report was being released one day early due to the U.S. holiday.

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Dollar at 1-month lows vs. euro, 6-month highs vs. yen

The dollar slipped to one-month lows against the euro on Wednesday, but traded up to almost six month highs against the yen in thin trade ahead of the U.S. Thanksgiving holiday on Thursday.

During European morning trade, USD/JPY was up 0.44% to 101.71, just below Monday’s six month peak of 101.91.

The yen remained under heavy selling pressure amid heightened expectations that the Bank of Japan will implement more easing measures next year.

Earlier Wednesday, BoJ board member Sayuri Shirai raised doubts over whether the bank’s target of 2% inflation can be reached by 2015 because of downside risks to growth.

The release of mixed U.S. economic data did little to shift expectations that the Federal Reserve will start to taper its stimulus program at one of its next few meetings.

Data released on Tuesday showed that U.S. consumer confidence unexpectedly fell to seven month low in November, but a separate report showed that the number of building permits issued in the U.S. rose to the highest level in five years in October.

Elsewhere, EUR/USD was up 0.14% to 1.3590, the highest level since October 31.

The euro extended gains after data showed that the forward looking Gfk index of German consumer climate rose to a six year high of 7.4 for December from 7.1 in November.

The pound was also higher against the dollar, with GBP/USD rising 0.11% to 1.6231 ahead of revised data on U.K. third quarter growth later in the session.

The dollar edged lower against the Swiss franc, with USD/CHF dipping 0.08% to trade at 0.9055.

The greenback was little changed against the Australian, New Zealand and Canadian dollars, with AUD/USD slipping 0.10% to 0.9115,NZD/USD edging down 0.01% to 0.8192 and USD/CAD inching up 0.12% to 1.0553.

Data released on Wednesday showed that New Zealand's trade deficit narrowed to NZD168 million last month, the narrowest deficit since 1996, while exports to China rose to a record high.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.02% to 80.62. 

The U.S. was to release reports on durable goods orders and manufacturing activity in the Chicago area later Wednesday, as well as the weekly report on initial jobless claims. The Labor Department report was being released one day early due to the U.S. holiday.

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German Gfk consumer climate rises to 6-year high in December

Germany's consumer climate for December rose to the highest level since August 2007, fuelling optimism over the health of the euro zone’s largest economy, industry data showed on Wednesday. 

In a report, market research group Gfk said its index of Germany's consumer climate rose by 0.3 points to 7.4 in December from 7.1 in November, whose figure was revised up from a reading of 7.0. 

Analysts had expected the index to remain unchanged at 7.1 in December. 

The report said that economic and income expectations registered considerable increases and willingness to buy reached a seven-year high.

Following the release of the data, the euro added to modest gains against the U.S. dollar, with EUR/USD inching up 0.15% to trade at 1.3594 from 1.3587 ahead of the data. 

Meanwhile, European stock markets remained higher. The EURO STOXX 50 added 0.1%, France's CAC 40 advanced 0.2%, the FTSE 100 edged up 0.2%, while Germany's DAX tacked on 0.15%.

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European stocks rise ahead of German, U.S. data; Dax up 0.18%

European stocks were higher on Wednesday, tracking Tuesday's Wallstreet rally as investors eyed the release of German consumer climate data, as well as a string of U.S. economic reports later in the day. 

During European morning trade, the EURO STOXX 50 rose 0.20%, France’s CAC 40 gained 0.29%, while Germany’s DAX 30 added 0.18%. 

The release of mixed U.S. economic data on Tuesday did little to shift expectations that the Federal Reserve will start to taper its stimulus program at one of its next few meetings.

Data showed that U.S. consumer confidence unexpectedly fell to seven month low in November, but a separate report showed that the number of building permits issued in the U.S. rose to the highest level in five years in October. 

Investors were eyeing preliminary euro zone inflation data, due out on Friday, amid expectations that the annual rate of inflation would rise to 0.8% in November, from October’s four year low of 0.7%.

Concerns over mounting deflationary pressures in the euro area prompted the European Central Bank to cut interest rates to a record low 0.25% at its November meeting. 

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale rose 0.27% and 0.66%, while Germany's Deutsche Bank added 0.17%. 

Among peripheral lenders, Spanish banks BBVA and Banco Santander gained 0.29% and 0.59% respectively, while Italy's Unicredit edged up 0.24%. 

Elsewhere, Orange climbed 0.44% after the Paris-based phone company agreed to sell its Dominican Republic unit to Altice, a cable and telecommunications investor, for USD1.4 billion. 

On the downside, hotel operator Accor plummeted 4.63% after saying it will separate the operation and ownership of hotels into two businesses. 

In London, FTSE 100 rose 0.21%, supported by sharp gains in the financial sector. 

Shares in HSBC Holdings gained 0.46% and Lloyds Banking advanced 0.57%, while Barclays and the Royal Bank of Scotland rallied 0.99% and 1.07% respectively. 

Mining stocks were also on the upside, as Glencore Xstrata climbed 0.42% and Randgold Resources gained 0.66%, while Polymetal jumped 1.08% and Vedanta Resources surged 1.99%. 

Tesco remained the worst performer on the index for the second consecutive session, down 3.03%, following reports the supermarket giant suffered a 6% drop in sales in the 12 weeks to November 10, leading to a 1.5% decline in its share of the multibillion Irish grocery market. 

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.09% increase, S&P 500 futures signaled a 0.05% gain, while the Nasdaq 100 futures indicated a 0.07% rise. 

Later in the day, Germany was to release the Gfk report on consumer climate. 

The U.S. was to release reports on durable goods orders and manufacturing activity in the Chicago area, as well as the weekly report on initial jobless claims. The Labor Department report was being released one day early due to the U.S. holiday.

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Asia stocks mixed; Nikkei ends down 0.4%

Asian stock markets were mixed in rangebound trade on Wednesday, amid ongoing uncertainty over the future of the Federal Reserve's stimulus program.

During late Asian trade, Hong Kong's Hang Seng Index inched up 0.4%, Australia’s ASX/200 Index ended 0.45% lower, while Japan’s Nikkei 225 Index closed down 0.42%.

Markets on Wall Street closed with modest gains on Tuesday after the Conference Board said that its index of consumer confidence declined to a seven-month low of 70.4 in November from a reading of 72.4 in October. 

The disappointing confidence data came after a flurry of upbeat U.S. housing data.

The U.S. Commerce Department said that the number of building permits issued in October rose 6.2% to a seasonally adjusted 1.034 million, the highest since June 2008, from September’s total of 0.970 million. 

Separately, Standard & Poor’s with Case-Shiller said its house price index rose at an annualized rate of 13.3% in September from a year earlier, the strongest increase since February 2006 and above forecasts for an increase of 13%.

Minutes of the Fed’s October meeting published last week revealed that the central bank could start scaling back its USD85 billion-a-month asset purchase program in the “coming months” if the economy continues to improve as expected.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of global equities.

In Tokyo, the Nikkei edged lower for the second consecutive session as traders continued to monitor movements in the currency market.

USD/JPY fell to hit a daily low of 101.23, moving further off a six-month high of 101.90 hit earlier in the week. A stronger yen reduces the value of overseas income at Japanese companies when repatriated, dampening the outlook for export earnings.

Automakers Toyota and Honda saw shares fall 0.5% and 0.95% respectively. 

Meanwhile, in Australia, the ASX/200 Index inched lower as losses in the mining sector weighed on the benchmark index.

BHP Billiton and Rio Tinto declined 1.45% and 1.15% respectively, while gold miners Newcrest Mining and Kingsgate Consolidated lost 4.1% 8.9% apiece.

Elsewhere, in Hong Kong, the Hang Seng edged higher after People’s Bank of China Governor Zhou Xiaochuan assured the market of more financial reforms, including free deposit rates and a more flexible currency.

Brokerages were higher following the comments, with CITIC Securities up 2.5% and Haitong Securities gaining 2.75%.

Looking ahead, European stock market futures pointed to a mixed open.

The EURO STOXX 50 futures pointed to a gain of 0.1% at the open, France’s CAC 40 futures declined 0.1%, London’s FTSE 100 futures indicated a flat open, while Germany's DAX futures pointed to an increase of 0.1%.

Meanwhile in the U.S., equity markets pointed to a flat open. The Dow Jones Industrial Average futures pointed to a 0.05% gain, S&P 500 futures signaled a 0.05% advance, while the Nasdaq 100 futures indicated a rise of 0.1%.

The U.S. is to release data on durable goods orders as well as a report on manufacturing activity in the Chicago region and revised data on consumer sentiment. 

In addition, the Labor Department is to release the weekly report on initial jobless claims one day ahead of schedule due to Thursday’s Thanksgiving holiday.

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Forex - Euro hits 1-month high vs. dollar and 4-year high vs. yen

The euro edged up to one month highs against the dollar on Wednesday and hit four year highs against the yen in thin trading conditions ahead of the U.S. Thanksgiving holiday on Thursday.

EUR/USD inched up 0.06% to 1.3580, the highest since October 31 from 1.3570 on Tuesday.

The pair was likely to find support at 1.3515 and resistance at 1.3645.

The release of mixed U.S. economic data did little to shift expectations that the Federal Reserve will start to taper its stimulus program at one of its next few meetings.

Data released on Tuesday showed that U.S. consumer confidence unexpectedly fell to seven month low in November, but a separate report showed that the number of building permits issued in the U.S. rose to the highest level in five years in October.

Investors were turning their attention to preliminary euro zone inflation data, due out on Friday, amid expectations that the annual rate of inflation would rise to 0.8% in November, from October’s four year low of 0.7%.

Concerns over mounting deflationary pressures in the euro area prompted the European Central Bank to cut interest rates to a record low 0.25% at its November meeting.

EUR/JPY rose 0.33% to 137.91, the highest level since October 2009 from 137.45 on Tuesday.

Elsewhere, the dollar regained ground against the yen, with USD/JPYclimbing 0.31% to 101.57, holding below the six-month high of 101.91 hit on Monday.

The U.S. was to release reports on durable goods orders and manufacturing activity in the Chicago area later Wednesday, as well as the weekly report on initial jobless claims. The Labor Department report was being released one day early due to the U.S. holiday.

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