9 March 2001, 12:28 Europe FX Opening: Summary of overnight moves and what's ahead
By Bridge News
London--March 9--The following is a summary of overnight moves since
Europe's close, plus possible leaders for the session ahead:
KEY ISSUES:
* Traders await details of LDP emergency economic package
* EPA's Aso rejects weak-JPY policy
* ECB bulletin, officials still reluctant about cutting rates
* US February employment report in focus
* German, UK January industrial production data due
--The USD slipped lower in US and Asian trading overnight despite a
100+ point rise in the Nikkei, though was showing signs of strength in
opening European trading. A profits warning from Intel after the Dow had
closed had little impact. The JPY gained strength after a Japanese
minister said a weak JPY policy is not welcome.
--In early Asian trading USD/JPY firmed to the day's high of 119.87 on
a Yomiuri Shimbum report that Japan's trade and economy minister Hiranuma
had said a certain degree of JPY weakness is acceptable. However, the pair
dropped after economic and fiscal policy minister Aso said he wouldn't
welcome a weak JPY policy to tackle deflation, and went on to a 2-day low
of 119.13 in late trading. The government's package of emergency economic
measures received a lukewarm welcome. Kyodo News reported an LDP official
who said Prime Minister Mori has expressed his intention to resign on
Saturday. Offers from Japanese exporters are reported in the 119.80-120
region, with stops below 119.20..
--EUR/USD bounced from the 0.9275 region in early US trading to hit a
high of 0.9335 in early Asian trading. The partial passage of President
Bush' tax package and a profits warning from Intel saw the Nasdaq come off
but neither had any appreciable impact. Trading is likely to be
constrained ahead of the US non-farm payrolls for February due at 1330
GMT. A BridgeNews poll forecasts a 90,000 increase in jobs and a 0.3%
increase in hourly earnings. In the euro zone, IP for January is due from
Germany and Spain during the day. Spain's economy minister Rato speaks at
1200 GMT while ECB board member Padoa-Schioppa speaks at 1315 GMT. The ECB
kept its euro zone growth forecast at close to 3.0%, despite its survey of
professional forecasters producing an average projection of 2.7%, down
from 3.1% at the end of last year. In its monthly report, the ECB also
said that inflationary risks are declining while growth remains robust.
ECB council member Solans, speaking late on Thursday said the beginning of
a downward trend in euro zone inflation is not certain yet, while ECB's
Padoa-Schioppa signalled in a newspaper interview today that the ECB
wouldn't cut rates with inflation currently above the 2.0% target ceiling.
--Cable firmed to a 2-day high around 1.4710 as the USD dipped lower.
UK industrial and manufacturing output for January are released at 0930 GMT.
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