The dollar is gaining ground against all of its major competitors on Tuesday. With the Fourth of July holiday drawing near, investors have turned cautious ahead of Thursday’s meetings for both the European Central Bank and the Bank of England. The all important U.S. jobs report for June will also be released at the end of the week.
New orders for U.S. manufactured goods rose by slightly more than expected in the month of May, according to a report released by the Commerce Department on Tuesday, with the increase largely due to a jump in orders for transportation equipment.
The Commerce Department said factory orders surged up by 2.1 percent in May following an upwardly revised 1.3 percent increase in April. Economists had expected orders to increase by 2.0 percent compared to the 1.0 percent growth originally reported for the previous month.
The Civic Choice Party has threatened to withdraw support for the Italian government, expressing its disapproval of the slow pace of implementation of reforms.
Moody’s Investors Service on Monday said it considered Cyprus to have “defaulted” after its recent exchange of EUR 1 billion of existing domestic government bonds with longer-term bonds.
The rating agency said that though the debt exchange was in accordance with Cyprus’s commitments under the bailout program agreed with international partners, this represented a ‘distressed exchange’ according to its definitions.
Cypriot authorities announced the completion of the exchange of bonds on Monday. The exchange involved an extension of existing bonds maturing from 2013 through 2016 with longer maturities and no change in the bond coupon.
Portugal’s Finance Minister Vitor Gaspar has resigned, the President’s office said on Monday. His resignation comes at a time when the government is struggling to plug a deficit gap amid growing resistance to further austerity measures.
Gaspar will be replaced by Treasury Secretary Maria Luis Albuquerque. Gaspar had drawn flak from all quarters for his support to the EU imposed austerity measures.
The dollar climbed to a high of $1.2989 against the Euro on Tuesday, but has since retreated to around $1.3025.
Euro area statistical agency Eurostat on Tuesday revised up the euro area unemployment rate for May to 12.2 percent from 12.1 percent reported a day earlier, following a correction in the French data.
Following the correction, there was a 0.5 percentage point upward revision in the French unemployment rate for May, which resulted in the overall jobless rates for the currency-bloc as well as the EU moving up by 0.1 percentage point, the agency said.
Driven by weak energy prices, Eurozone producer prices declined further in May, opening up the scope for more monetary action from the central bank to kick start the recovery. Easing for the second consecutive month, producer prices were down 0.1 percent in May from the same period of last year, after falling 0.2 percent in April, data published by Eurostat revealed Tuesday. Economists had forecast prices to remain flat.
Bank of England Deputy Governors Andrew Bailey and Paul Tucker told lawmakers that U.K. regulators should limit the leverage ratio of U.K. banks at 3 percent.
This rule will limit the amount banks can lend relative to their capital. Policymakers now plan to impose this rule on banks, about five years ahead of globally agreed deadline.
The greenback dipped to an early low of $1.5237 against the pound sterling Tuesday morning, but has since climbed to around $1.5165.
U.K. construction sector expanded for the second straight month in June helped by strong residential building activity, and business confidence in the sector rose to the highest level in more than a year, in yet another sign that the economy is set to record faster improvement in the second quarter.
Survey data released by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) on Tuesday showed that the purchasing managers’ index for the construction sector rose to a 13-month high of 51 in June from 50.8 in May.
The buck has extended its gains against the Japanese Yen to a fourth consecutive session Tuesday, reaching a 1-month high of Y100.446.
The monetary base in Japan spiked 36.0 percent on year in June, the Bank of Japan said on Tuesday, standing at 163.537 trillion yen. That follows the 31.6 percent surge in May.
Japan’s total labor cash earnings stayed unchanged for a second consecutive month in May, preliminary figures from the Labor Ministry showed Tuesday. Total wages in May amounted to JPY 267,567. Wages have been falling almost steadily since May 2012.