Author Archives: admin

The dollar dropped initially after Federal Reserve Chair Janet Yellen made some hawkish comments during her speech late this morning, but quickly reversed and has turned sharply higher. Yellen stated that the case for another interest-rate hike has strengthened recently. Her comments propelled the U.S. currency higher, overshadowing some lackluster economic data earlier this morning.

“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen said in a speech prepared for delivery to the Jackson Hole summit.

However, the Fed’s decision “always depends on the degree to which incoming data continues to confirm the Fed policy committee’s outlook.”

U.S. economic activity in the second quarter grew by slightly less than initially estimated, according to a report released by the Commerce Department on Friday.

The report said gross domestic product increased by 1.1 percent in the second quarter, reflecting a downward revision compared to the originally reported 1.2 percent growth. The revision matched economist estimates.
Consumer sentiment in the U.S. unexpectedly saw a slight decline in the month of August, according to a report released by the University of Michigan on Friday. The report said the final reading on the consumer sentiment index for August came in at 89.8 compared to the initial estimate of 90.4.

The downward revision came as a surprise to economists, who had expected the index to be upwardly revised to a reading of 90.7.

The dollar has jumped to a week and a half high of $1.1205 against the Euro Friday afternoon, from a low of $1.1340.

German consumer sentiment is set to develop positively in September as Brexit vote seems to have caused only temporary uncertainty, survey results from the market research group GfK showed Friday.

The forward-looking consumer climate index rose to 10.2 in September from 10.0 in August. The score was forecast to remain unchanged at 10.0 in September.

France’s gross domestic product stagnated as estimated in the second quarter, the second estimate from the statistical office Insee showed Friday. Gross domestic product remained flat from the prior quarter, after expanding 0.7 percent in the first quarter.

France’s consumer confidence improved unexpectedly in August, though marginally, figures from the statistical office INSEE showed Friday. The consumer confidence index rose to 97.0 in August from 96.0 in the previous month. Economists had expected the index to remain unchanged at 96.0.

The buck has broken out to a 3-session high of $1.3130 against the pound sterling Friday afternoon, from a low of $1.3278.

The U.K. economy expanded at a faster pace in the second quarter as previously estimated, in run-up to the EU referendum, the second estimate from the Office for National Statistics showed Friday. Gross domestic product grew 0.6 percent sequentially after rising 0.4 percent in the first quarter. The growth figures matched preliminary estimate published on July 27.

British business investment increased in the three months to June, marking the first growth since the third quarter of last year, figures from the Office for National Statistics showed Friday. Business investment rose 0.5 percent from the first quarter, when it declined 0.6 percent. In the same period last year, business investment grew 1.6 percent.

The greenback has surged to a 2-week high of Y101.680 against the Japanese yen this afternoon, from a low of Y100.193 this morning.

Consumer prices in Japan slipped 0.4 percent on year in July, the Ministry of Internal Affairs and Communications said on Friday – matching expectations and unchanged from June’s annual reading.

Core CPI, which excludes volatile food costs, slid 0.5 percent on year – missing forecasts for -0.4 percent, which would have been unchanged.

The Canadian dollar advanced against its major rivals in early New York deals on Wednesday, after the Bank of Canada kept benchmark interest rate unchanged, as inflation remains roughly in line with the Bank’s expectations.

The BoC maintained its target for the overnight rate at 0.5 percent. The decision was in line with forecasts.

The bank expects the second quarter economic growth to be much weaker than predicted, due to the devastating Alberta wildfires. The Bank said it predicts the fire-related destruction and the associated halt to oil production would cut about 1.25 percentage points off real GDP growth in the second quarter.

Crude oil futures surged near $50 a barrel ahead of data that may confirm a large drawdown in U.S. oil inventories.

The American Petroleum Institute said late Tuesday that its data for last week showed a 5.1-million-barrel decrease in crude supplies, a drop nearly twice as large ass analysts were expecting.

The U.S. Energy Information Administration will release its official data shortly.

The loonie showed mixed trading in European deals. While the currency held steady against the aussie and the yen, it fell modestly against the euro and the greenback.

Reversing from an early low of 0.9453 against the aussie, the loonie edged up to 0.9403. The loonie may locate resistance around the 0.92 zone.

The loonie firmed to 6-day highs of 84.55 versus the yen and 1.3052 versus the greenback, off its early lows of 83.73 and 1.3133, respectively. The next possible resistance levels for the loonie are seen around 86.00 against the yen and 1.28 against the greenback.

The loonie advanced to a weekly high of 1.4551 versus euro, reversing from an early low of 1.4640. Further uptrend may lead the loonie to a resistance around the 1.44 mark.

German consumer confidence is set to strengthen in June, a monthly survey by research group GfK showed. The consumer sentiment indicator, based on a survey of around 2,000 Germans, rose to 9.8 from 9.7 in May. It was forecast to remain unchanged in June.

The U.S. dollar extended overnight rally against its key counterparts in pre-European trading on Thursday, as minutes from the Federal Reserve’s April meeting showed an optimistic outlook about the U.S. economy and hinted at the possibility of an interest rate hike in June.

“Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor market conditions continuing to strengthen, and inflation making progress toward the Committee’s 2 percent objective, then it likely would be appropriate for the Committee to increase the target range for the federal funds rate in June,” the minutes from the April 26-27 meeting showed.

The Fed minutes echoed recent speeches by Fed officials, who led the markets to price in a hike as soon as next month.

Investors now focus on weekly jobless claims for the week ended May 14, as well as speeches by Fed Vice Chairman Stanley Fischer and New York Fed chief William Dudley in New York for more indications about the monetary policy.

The greenback appreciated 1.3 percent against the franc, 1.5 percent against the yen and 0.8 percent against the euro since last week, on growing hopes for an early Fed rate hike.

The greenback rallied to a 2-month high of 0.9886 against the Swiss franc, compared to 0.9876 hit late New York Wednesday. Continuation of the greenback’s uptrend may see it challenging resistance around the 1.00 mark.

The greenback appreciated a 3-week high of 110.38 against the yen, up from yesterday’s closing quote of 110.19.If the greenback-yen pair extend gain, 112.00 is likely seen as its next resistance level.

Data from the Cabinet Office showed that Japan’s core machine orders jumped 5.5 percent on month in March.

That beat forecasts for a decline of 2.0 percent following the 9.2 percent slide in February.

The greenback hit 1.1206 against the euro, its highest since March 29. The pair was worth 1.1215 when it closed yesterday’s trading. On the upside, the greenback is likely to find resistance around the 1.10 level.

The greenback was trading higher at 1.4563 against the pound, up from Wednesday’s closing value of 1.4596. The next possible resistance for the greenback may be found around the 1.43 region.

The greenback spiked up to a 2-1/2-month high of 0.7192 against the aussie and a 1-1/2-month high of 1.3081 against the loonie, from yesterday’s closing values of 0.7228 and 1.3034, respectively. The greenback is seen finding resistance around 0.70 against the aussie and 1.32 against the loonie.

Looking ahead, U.K. retail sales data for April and Eurozone construction output for March are due to be released, later in the day.

At 7:30 am ET, European Central Bank will publish the minutes of April rate setting meeting in Frankfurt.

In the New York session, Canada wholesales data for March and U.S. weekly jobless claims for the week ended May 14, Philadelphia Fed manufacturing index for May and U.S. leading indicators for April are slated for release.

At 8:00 am ET, ECB Governing council member and central bank of Ireland Governor Philip Lane is expected to speak at the capital markets conference in Dublin.

The dollar dropped against all of its major rivals Friday morning, following the release of several weaker than expected economic reports. The U.S. currency has pared its losses over the course of the trading day and is now turning in a mixed performance. The buck is down against the Euro and the Japanese Yen, but has turned positive against the British pound.

After reporting much stronger than expected U.S. retail sales growth in the previous month, the Commerce Department released a report on Friday showing that retail sales were unexpectedly flat in the month of July.

The Commerce Department said retail sales were virtually unchanged in July after climbing by an upwardly revised 0.8 percent in June. Economists had expected sales to rise by 0.4 percent compared to the 0.6 percent increase originally reported for the previous month.

Partly reflecting a steep drop in prices for trade services, the Labor Department released a report on Friday showing an unexpected decrease in U.S. producer prices in the month of July. The Labor Department said its producer price index for final demand fell by 0.4 percent in July after rising by 0.5 percent in June. Economists had expected the index to inch up by 0.1 percent.

Consumer sentiment in the U.S. has improved by less than expected in the month of August, according to a preliminary report released by the University of Michigan on Friday. The report said the consumer sentiment index inched up to 90.4 in August from the final July reading of 90.0. Economists had expected the index to climb to 91.5.

Business inventories in the U.S. rose by slightly more than expected in the month of June, the Commerce Department revealed a report released on Friday. The Commerce Department said business inventories edged up by 0.2 percent in June, matching the uptick seen in May. Economists had expected inventories to inch up by 0.1 percent.

The dollar dropped to over a 1-week low of $1.1221 against the Euro Friday morning, but has since rebounded to around $1.1165.

Eurozone economic growth slowed as estimated in the second quarter, as France and Italy failed to expand, amid “Brexit” concerns. Gross domestic product rose 0.3 percent from the first quarter, when it climbed 0.6 percent, flash estimate published by Eurostat showed Friday. A similar slower growth was last seen in the third quarter of 2015.

Eurozone industrial production recovered at a stronger than expected pace in June, figures from Eurostat revealed Friday. Industrial output climbed 0.6 percent on a monthly basis in June, reversing a 1.2 percent fall in May and slightly bigger than the expected 0.5 percent increase.

Germany’s economic growth eased less than expected in the second quarter, underpinned by exports and domestic demand, suggesting that concerns about “Brexit” were less damaging.

Gross domestic product grew 0.4 percent quarter-over-quarter in the second quarter, data from Destatis showed Friday. This marked a slowdown from the 0.7 percent growth in the first quarter. Economists had forecast the pace of growth to ease to 0.2 percent.

Germany’s consumer prices increased for the third straight month in July as initially estimated, latest figures from Destatis showed Friday. The consumer price index rose 0.4 percent year-over-year in July, confirming the flash data, following a 0.3 percent climb in the previous month.

France’s non-farm payroll continued to grow in the second quarter amid sustained job creation in the services sector, the statistical office INSEE said Friday. Employment in the non-farm sectors grew 0.2 percent or by 24,100 jobs from the previous quarter. In the first quarter, 37,300 jobs were created.

The buck fell to a low of $1.3034 against the pound sterling Friday morning, but has since bounced back to a 1-month high of $1.2910.

U.K. construction output declined at a slower pace in June, the Office for National Statistics showed Friday. Construction output dropped 0.9 percent in June from May, when it decreased 2 percent. This was the smallest drop in four months. Economists had forecast a 1 percent fall for June.

The greenback slipped to a 1-week low of Y100.830 against the Japanese Yen this morning, but has since risen back to around Y101.090.

The U.S. dollar weakened against the other major currencies in the Asian session on Wednesday, as weak U.S. business productivity data in the second quarter raised speculation that the Federal Reserve would be slow to raise interest rates.

The Labor Department released a report on Tuesday showing an unexpected decline in U.S. labor productivity. The report showed that productivity fell by 0.5 percent in the second quarter after sliding by 0.6 percent in the first quarter. The decrease came as a surprise to economists, who had expected productivity to climb by 0.5 percent.

Meanwhile, the Labor Department said unit labor costs surged up by 2.0 percent in the second quarter after edging down by a revised 0.2 percent in the first quarter. Economists had expected labor costs to climb by 1.8 percent compared to the 4.5 percent jump that had been reported for the previous quarter.

Tuesday, the U.S. dollar showed mixed trading against its major rivals. While the U.S. dollar rose against the pound and the Swiss franc, it fell against the euro and the yen.

In the Asian trading, the U.S. dollar fell to 5-day lows of 1.1156 against the euro and 101.16 against the yen, from yesterday’s closing quotes of 1.1116 and 101.87, respectively. If the greenback extends its downtrend, it is likely to find support around 1.13 against the euro and 98.00 against the yen.

Against the pound and the Swiss franc, the greenback dropped to 2-day lows of 1.3090 and 0.9793 from yesterday’s closing quotes of 1.3001 and 0.9810, respectively. The greenback is likely to find support around 1.35 against the pound and 0.96 against the franc.

Against the Australian, the New Zealand and the Canadian dollars, the greenback slipped to more than a 3-month low of 0.7707, 1-week low of 0.7223 and a 5-day low of 1.3051, from yesterday’s closing quotes of 0.7671, 0.7163 and 1.3119, respectively. The greenback may test support near 0.78 against the aussie, 0.73 against the kiwi and 1.27 against the loonie.

Looking ahead, U.S. crude oil inventories data is due to be released in the New York session.

At 2:00 pm ET, U.S. Federal monthly budget statement for July is slated for release.