The dollar is nearly unchanged against its major European competitors on Tuesday, but is up slightly against the Japanese Yen. Investors are awaiting the release of the minutes from the most recent meeting of the FOMC, which will be released on Wednesday. Federal Reserve Chairman Ben Bernanke is also expected to speak in Washington this evening. Investors will be watching both for any clues to when the Federal Reserve plans to begin tapering its stimulus measures.
Employee compensation costs in the U.S. rose by slightly less than expected in the third quarter, according to a report released by the Labor Department on Tuesday.
The Labor Department said its employment cost index rose by 0.4 percent in the third quarter following a 0.5 percent increase in the second quarter. Economists had expected the index to rise by another 0.5 percent.
There will be a number of important pieces of economic data released on Wednesday, including U.S. retail sales, existing home sales and the consumer price index.
The Organization for Economic Co-operation and Development downgraded its global growth projections, citing worsening outlook for some emerging economies. In the latest semi-annual Economic Outlook published Tuesday, the Paris-based organization underscored a range of downside risks to the recovery and cautioned that the path is set to be turbulent.
Further, the organization urged policymakers to ensure that instability in financial markets and underlying fragility in some major economies are not allowed to derail growth.
The growth in the United States is projected to be 2.9 percent in 2014 and 3.4 percent in 2015. A tapering of US Federal Reserve asset purchases may bring a renewed bout of instability, noted the OECD. It appealed the United States to avoid fiscal brinkmanship.
The OECD also called for an end to fiscal deadlock in the United States, through the abolition of the nominal debt ceiling and implementation of a coordinated medium-term fiscal plan.
The dollar has been hovering around the $1.3510 level against the Euro on Tuesday, but has since slipped to around $1.3530.
Eurozone’s construction output declined in September for the first time in six months, data released by Eurostat showed on Tuesday. Construction output decreased a seasonally adjusted 1.3 percent from August, when it grew 0.3 percent, which was downwardly revised from 0.5 percent. The latest fall was the first since March.
German investor confidence rose to its highest level in four years in November, driven by hopes of economic recovery gaining momentum in the euro area, the results of a closely-watched survey showed Tuesday.
The indicator of economic sentiment for Germany rose for the fourth consecutive month to 54.6 from 52.8 in October, the Mannheim-based Centre for European Economic Research/ZEW said. Economists had forecast a score of 54. The latest reading is the highest since October 2009.
Germany’s employment growth maintained a steady pace in the third quarter, data released by the Federal Statistical Office showed on Tuesday. The number of employed grew by 0.6 percent or 253,000 year-on-year in the three months to September. Employment also rose 0.6 percent in the second quarter.
The greenback climbed to an early high of $1.6058 against the pound sterling on Tuesday, but has since pulled back to around $1.6110, nearly unchanged for the session.
Japan will avoid issuing bonds to fund the economic stimulus package, Economy Minister Akira Amari told reporters on Tuesday. The government plans to compile a package worth around JPY 5 trillion to offset the impact of the sales tax hike. The consumption tax will be raised to 8 percent from next April.
The buck has rebounded from yesterday’s low of Y99.563 against the Japanese Yen on Tuesday, to around Y100.100.
Japan’s leading economic index strengthened in September, but at a slower than initially estimated pace, final data from the Cabinet Office showed Tuesday. The leading index that is designed to measure changes in the direction of the economy rose to 109.2 in September from 106.8 in August. The preliminary reading for September was 109.5.