The dollar has begun to rebound from the sharp sell-off of the previous session on Friday. The drop in the U.S. currency was sparked by investor concerns that the nation will soon be embroiled in another budget battle around the start of the new year. While investors were relieved that lawmakers reached a last minute deal to avoid a potential default, the solution was only a temporary fix.
Investors will be watching for a large number of U.S. economic reports next week. With the federal government back up and running, all of the data that was due to be released during the shutdown will begin to make its way out. The closely watched monthly jobs report for September will be released on Tuesday, October 22nd.
Any move by the European Central Bank to raise rates now, thereby deviating from the global trend, could increase the euro exchange rate and hurt the economic recovery, ECB Governing Council Member Ewald Nowotny warned on Friday.
The dollar dipped over an 8-month low of $1.3703 against the Euro early Friday, extending the weakness of the previous session, but has since inched back to around $1.3695.
A leading indicator of the French economy increased for the second successive month in August, and at a faster pace than in the previous month, data released by research firm Conference Board showed Friday.
The Conference Board Leading Economic Index advanced 0.6 percent month-on-month to 116.3 in August, after rising 0.3 percent in the previous month. In June, the index had recorded a 0.1 percent decrease.
The Bank of England’s Monetary Policy Committee is very unlikely to raise interest rates next year, policymaker Spencer Dale said on Friday.
Answering questions on the micro-blogging site Twitter, the BoE Chief Economist said, “I think it’s very unlikely that we will raise Bank rate in 2014. We need to see sustained period of strong growth.”
The greenback dropped to a 2-week low of $1.6224 against the pound sterling early Friday, but has since rebounded to around $1.6175.
Confidence among British businesses increased to its highest level in three years as firms turned increasingly optimistic about their own prospects, a survey by software firm Sage revealed Friday. The business index for the U.K. rose to 62.55 in the summer of 2013 from 58.46 in 2012.
The Bank of Japan is prepared to take additional policy measures if the central bank judges the 2 percent price stability target is impossible to attain, Deputy Governor Kikuo Iwata said Friday.
Japan’s economy is judged to be on the verge of escaping from the deflation that has lasted for a long time, and it is recovering moderately, Iwata said during a speech at Chuo University.
Bank of Japan Governor Haruhiko Kuroda reportedly said Friday that the effects of the central bank’s monetary easing are becoming visible and that the positive momentum is spreading to the real economy.
Standard & Poor’s on Friday affirmed its sovereign credit ratings on Japan, citing the economy’s strong external position and improved political stability. Japan’s long- and short-term unsolicited sovereign credit ratings were affirmed at ‘AA-‘ and ‘A-1+’, respectively. The outlook on the long-term rating remained ‘negative.’
The buck dropped to a 1-week low of Y97.548 against the Japanese Yen on Friday, but has since bounced back to around Y97.765.