The dollar is climbing against all of its major competitors at the end of the trading week. The stronger than expected increase in U.S. consumer confidence helped to assure investors of recovery in the U.S. economy, following the release of some weak data in recent days.
Consumer sentiment in the U.S. has seen a substantial improvement in the month of May, according to a report released by Thomson Reuters and the University of Michigan on Friday, with the consumer sentiment index rising to its highest level in nearly six years.
The report showed that the preliminary reading on the consumer sentiment index for May came in at 83.7 compared to the final April reading of 76.4. With the sharp jump, the consumer sentiment index came in well above economist estimates for a reading of 78.0 and reached its highest level since July of 2007.
Led by building permits and the interest rate spread, leading economic indicators in the U.S. rose by more than anticipated in the month of April, according to a report released by the Conference Board on Friday. The Conference Board said its leading economic index rose by 0.6 percent in April following a revised 0.2 percent decrease in March.
Economists had been expecting the index to increase by a more modest 0.3 percent compared to the 0.1 percent drop originally reported for the previous month.
The French economy is likely to grow in the second half of this year, Finance Minister Pierre Moscovici said in an interview with RTL radio, after official data showed that the nation entered a recession in the first quarter. Moscovici said he is confident that the unemployment will drop by the end of 2013.
European banks’ asset quality review and stress test should be conducted by mid-2014, before the European Central Bank takes over banking supervision, Executive Board member Yves Mersch said Friday.
“The SSM could undertake the asset quality review in the third quarter of this year until the first quarter of next year, and then in close cooperation with the EBA, conduct a stress test,” Mersch said in a speech in London.
European Central Bank Executive Board member Benoit Coeure said Friday that the central bank is looking at options to improve lending to small firms, which form the backbone of the Eurozone economy.
“The ECB is today exploring options to further strengthen lending to the real economy and, in particular, to small and medium-sized enterprises,” he said in a speech in Orleans, France. “But the ECB can only act within its mandate,” Coeure said.
The dollar dipped to an early low of $1.2888 against the Euro on Friday, but has since climbed to a month and a half high of $1.2795.
New car registrations in the European Union (EU) increased from last year in April, for the first time in more than one-and half years, data released by the European Automobile Manufacturers’ Association (ACEA) showed Friday.
Sales of new passenger cars advanced 1.7 percent on an annual basis to around 1.04 million units in April, reversing the 10.2 percent fall recorded in March. The increase was the first since September 2011.
April’s upturn was probably driven by the two additional working-days compared to the same month last year, the agency said.
Eurozone construction output continued its decline for the fifth month in a row in March, Eurostat reported Friday. Production in construction fell at a faster pace of 1.7 percent, following a 0.3 percent drop in February. Building construction and civil engineering slid 1.4 percent and 2.4 percent, respectively.
Bank of England policymaker Martin Weale said the bank’s capacity to add stimulus is limited by the risk to inflation expectations.
“Failure to damp sufficiently any new shock pushing up on inflation would result in inflation expectations becoming more entrenched,” he said in a speech delivered at the British-American Business Council Transatlantic Conference on Friday.
The greenback has rebounded from yesterday’s low of $1.5322 against the pound sterling on Friday, to a month and a half high of $1.5157.
The buck has broken out to Y103.133 against the Japanese Yen, its highest level since October of 2008.
Core machine orders in Japan surged a seasonally adjusted 14.2 percent on month in March to 793.1 billion yen, the Cabinet Office said on Friday rising for the fifth time in six months. The headline figure shattered forecasts for an increase of 3.5 percent following the downwardly revised 4.2 percent increase in February.
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