The increase in retail sales spurred the New Zealand dollar

The increase in retail sales spurred the New Zealand dollar, but other currencies remained mostly motionless

In connection with national holidays in the United States and Canada yesterday for the currency market was relatively quiet. Most of the session, the dollar’d play the gains made in early Asian trading. In the absence of economic statistics, stock markets moved on to the next report revenue for the 3 quarter, and eventually the S & P closed near the new 12-month high.

Despite the retreat of the dollar, British pound is still brought up the rear, crushed projections of the Center of Economic and Business Research (CEBR) on interest rates and foreign exchange market. In addition, Prime Minister Gordon Brown reiterated the Government’s intention to sell assets worth 16 billion pounds sterling, adding that if the complete program of increasing the money supply now, it will thwart the scenario of economic recovery.

Much of the activity in the Asian session took place at its first half, when New Zealand has published a brilliant performance in retail sales for August. Sales climbed out of negative territory (-0.5% in July) and showed a monthly increase of 1,1%. As these data indicate a steady economic recovery from the recession, it could make RBNZ to reconsider their views on interest rates or, at least, to stop insisting on the need for further rate cuts. New Zealand Dollar happily took this news and rushed forward against the U.S. dollar and Australian dollar.

Australian statistics on the one hand, brought a little disappointing. NAB business conditions index dropped to a mark 3, showing the first decline in 4 months, the index showed business confidence and the worst results – just minus 4 points. This decline was mainly due to the decline of profitability and deteriorating terms of trade, but it was partially offset by an increase of urgent orders and intentions to recruit staff. Despite the fact that such results are unlikely to cast doubt on the recent rise in interest rates, RBA (note that the published tomorrow, Westpac Consumer Confidence Index was compiled after a rate hike), traders are reminded what it means to analyze secondary data.

During the morning session, Asian markets slipped anti-risk tendencies, caused by an article in “Yonhap News”, which stated that North Korea could continue firing rockets from the north-western coast after it made the day before five launches short-range missiles. Amid such geopolitical news demand for U.S. T-bills increased dramatically, and the yield on 10-year bond fell 4 basis points to 3,43%. However, the dollar / yen so far this news has not made the desired effect – at the time of publication of this review pair traded in the region around 90.

Pound received a short-term support from the RICS report on housing prices for September. According to the survey, house prices in Britain reached its highest level for almost 2,5 years, while representatives of RICS attributed the strengthening of prices rather lack of supply than an increase in demand. Ratio of average sales and stock of unsold properties rose from 27 to 29 – is the maximum figure recorded since December 2007. More statistical news: BRC reported that in September the growth rate of retail sales reached the highest level for the past 5 months as good weather and improved economic prospects stimulate confidence. As a result of the sale of similar goods rose by 2,8%, while total sales – by 4,9% compared with the previous year. However, the effect of these positive data for the pound was short-lived, and with the advent of anti-risk sentiment in the market rate of pound / dollar sank below the level of opening.

Today, of the European statistics published indices CPI and RPI from the UK, which may involve a little more attention to the players than the previous data, as well as any unplanned growth will help keep the pound from falling further. Also, pending the outcome of ZEW research institute in Germany and the EU, and on the North American session will be released price index for housing in Canada. Do not forget that on the approach the new portion of corporate reports for the 3 quarter, and the results can reverse the anti-risk scenario, which was played today in Asia.

Saxo Bank