The dollar has begun to improve against its major European competitors on Friday, following the release of the better than expected consumer sentiment data. However, the U.S. currency has continued to weaken against the Japanese Yen. Investors also appear to be turning more cautious ahead of the upcoming FOMC meeting on Wednesday, as well as the U.S. jobs report for July, which will be released next week Friday.
Consumer sentiment in the U.S. improved to its best level in six years in the month of July, according to a report released by Thomson Reuters and the University of Michigan on Friday. The report showed that the consumer sentiment index for July was upwardly revised to 85.1 from the preliminary reading of 83.9. Economists had expected the index to be upwardly revised to 84.0.
Eurozone finance ministers approved the payment of next aid tranche to Greece, at a conference call on Friday, after the nation met the conditions set by lenders.
The installment of EUR 2.5 billion will be disbursed on Monday subject to the completion of national approval procedures. The German parliament committee will meet on Monday to clear its portion of contribution.
Greece will also receive EUR 1.5 billion, the profits that the European Central Bank made from the sale of Greek debt.
The dollar traded in a range around the $1.3280 level against the Euro early Friday, but has since improved to around $1.3265.
Eurozone’s leading economic index increased for the third successive month in June, adding to hopes that the recession-stricken economy would recover in the second half, data from a survey by the Conference Board showed Friday.
The leading economic index moved up 0.5 percent on a monthly basis to 107.5 in June, marking the third successive growth. In May and April, the index rose by 0.4 percent and 0.1 percent respectively.
An indicator of current economic situation in the euro area improved in July, helped by favorable results of surveys conducted among households and firms, data from the Bank of Italy showed Friday. The eurocoin indicator rose to -0.09 in July from -0.18 in June, offsetting the deterioration recorded in the previous two months. The easing of tensions in the financial markets also underpinned recovery, it said.
Germany’s import prices declined for a sixth consecutive month in June, the latest figures from the Federal Statistical Office showed Friday. Import prices declined 2.2 percent year-on-year in June, after a 2.9 percent fall in May. The pace of decline, however, was the slowest in four months.
French consumer confidence improved to 82 in July from a revised reading of 79 a month ago, survey data from the statistical office Insee showed Friday. Economists had forecast the index to rise to 79 from June’s initially estimated record low level 78.
The greenback was also range-bound around the $1.5400 level against the pound sterling early Friday, but has since climbed to around $1.5360.
Residential property prices in England and Wales increased in June after staying unchanged in the previous month, data from a survey by the Land Registry showed Friday. The house price index increased 0.6 percent on a monthly basis in June, after holding steady in May. In April, prices had recorded a 0.7 percent gain.
Japan’s inflation, which increased notably in June due to weak exchange rate, will likely rise further towards the end of the year as more of the impact of yen weakness feeds through, Capital Economics Japan Economist Marcel Thieliant said.
However, due to persistent spare capacity in the economy and only limited growth in basic pay, underlying inflationary pressures are likely to remain subdued, the firm said.
According to the economist, inflation excluding food and energy, much of which is imported, is still negative and should remain so for some time.
The buck extended yesterday’s losses against the Japanese Yen to a 1-month low of Y97.948 on Friday, from Wednesday’s high of Y100.444.
Core consumer prices in Japan spiked 0.4 percent on year in June, the Ministry of Internal Affairs and Communications said on Friday, marking the fastest annual increase since November. The headline figure beat forecasts for an increase of 0.3 percent on year following the flat annual reading in May.
