The dollar is currently gaining ground against all of its major competitors on Wednesday, ahead of the release of the Beige Book this afternoon. The stronger than expected increase in the Empire State manufacturing index has also contributed to the dollar’s strength.
Producer prices rose in line with economist estimates in the month of December, according to a report released by the Labor Department on Wednesday, with higher prices for energy and tobacco products offsetting a drop in food prices.
The Labor Department said its producer price index rose by 0.4 percent in December after edging down by 0.1 percent in November. The increase by the index matched economist estimates.
Business activity for New York manufacturers expanded at a faster pace in the month of January, the Federal Reserve Bank of New York revealed in a report on Wednesday, with the index of regional activity rising much more than anticipated.
The New York Fed said its general business conditions index jumped to 12.5 in January from 2.2 in December, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to climb to 3.5.
The World Bank on Wednesday raised its growth projections for the global economy saying that the easing of fiscal consolidation measures in high-income countries has boosted growth prospects. Releasing the latest Global Economic Prospects report, the lender said it now expects the world economy to grow 3.2 percent this year, stronger than the 3 percent expansion forecast in the June report.
In 2015, the global gross domestic product is expected to grow 3.4 percent, slightly faster than 3.3 percent forecast earlier. The bank projects 3.5 percent expansion in 2016.
The U.S. economy is projected to grow 2.8 percent this year, faster than last year’s 1.8 percent expansion. Thereafter, growth is seen firming to 2.9 and 3 percent in 2015 and 2016, respectively. The outlook was mostly unchanged from June.
Euro area is forecast to grow 1.1 percent this year, ending two years of recession. The 18-nation economy is seen expanding at a pace of 1.4 and 1.5 percent in 2015 and 2016, respectively. In June, the World Bank projected euro area growth at 0.9 percent this year and 1.5 percent in 2015.
The dollar has rebounded from yesterday’s low of $1.3698 against the Euro, to around $1.3600 on Wednesday.
Eurozone exports declined for the first time in four months in November, data released by Eurostat showed Wednesday. Shipments dropped by seasonally adjusted 0.2 percent month-on-month, following nil growth in October. At the same time, the decline in imports deepened to 1.3 percent from 1 percent.
On an unadjusted basis, the trade surplus came in at EUR 17.1 billion, compared to EUR 16.8 billion surplus in October. The expected surplus for November was EUR 16.5 billion.
Recession in some European countries together with slow global growth dampened Germany’s economic growth in 2013. Despite experiencing a deceleration, the largest euro area economy expanded for the fourth consecutive year.
Gross domestic product grew 0.4 percent in 2013, which was slower than a 0.7 percent rise in 2012 and a 3.3 percent increase in 2011, the latest figures from the Federal Statistical Office showed Wednesday. The full-year estimate was below 0.5 percent forecast by economists.
The greenback has also bounced back from yesterday’s low of $1.6463 against the pound sterling, to around $1.6360 on Wednesday.
A leading indicator of the British economy increased for the fifth consecutive month in November, suggesting that the economy will continue expanding in the coming months, data released by the Conference Board revealed Wednesday.
The leading economic index increased 0.5 percent month-on-month to 108.3 in November, after rising 0.4 percent in October and 1.6 percent in September. The index has now recorded positive growth for the fifth consecutive month.
The buck has extended yesterday’s gains against the Japanese Yen to around Y104.400 on Wednesday, from Monday’s low of Y102.846.
Japan’s machine tool orders increased significantly in December, data released by the Japan Machine Tool Builders’ Association (JMTBA) showed Wednesday. The value of orders for machine tools climbed 28 percent annually to 1116.98 billion yen in December. Demand in the domestic market advanced 41.6 percent, and export demand rose by 21.9 percent.
The M2 money stock in Japan jumped 4.2 percent on year in December, the Bank of Japan said on Wednesday, standing at 862.8 trillion yen. The headline figure was shy of forecasts for an increase of 4.3 percent and down from the upwardly revised 4.4 percent gain in November.