The dollar is little changed against the Euro and the pound sterling at the beginning of the new trading week, but is gaining ground against the Japanese Yen. There has been very little news to drive the direction of trade Monday. The majority of the U.S. economic data that is set to be released this week will come out on Thursday and Friday.
Credit ratings agency Standard & Poor’s upgraded its outlook for the U.S. credit rating to “stable” from “negative” on Monday, reducing the likelihood of a near-term downgrade. S&P said the stable outlook reflects receding downside risks to the ‘AA+’ rating on the U.S., which have reduced the likelihood of a ratings downgrade to less than one in three.
The French economy is set to witness modest growth in the second quarter, after entering recession in the first three months of the year, the Bank of France said on Monday.
The bank forecast 0.1 percent growth in the second quarter, maintaining its earlier projection. During the first quarter, gross domestic product fell 0.2 percent, after a similar size decline in the final three months of 2012.
The German economy has largely overcome the weak phase, Bundesbank President Jens Weidmann said in a speech on Monday. Weidmann expects a moderate growth this year. But much will depend on the developments in Europe, he said in Frankfurt.
European Central Bank Executive Board member Benoit Coeure on Monday said it is the responsibility of elected governments to steer income allocation.
“In the current environment it is essential that euro area governments continue their reform efforts, individually and jointly, keeping in mind the need to curtail rent-seeking behaviour and protect the weakest in society,” he said.
The euro area still requires the current accommodative monetary policy stance, European Central Bank Governing Council member Ewald Nowotny said Monday.
The financial system has achieved a fair amount of stabilization, Nowotny said in Vienna. But there are major challenges for the banking sector, especially in Europe.
“We still see a struggling real economy and overstretched public finances, he said.”This is why an accommodative monetary stance is still needed.”
The dollar rose to an early high of $1.3176 Monday morning, but has since pulled back to around $1.3230.
Investor confidence in Eurozone improved for a second consecutive month in June, data released by think-tank Sentix showed Monday. The investor sentiment index rose to -11.6 in June from -15.6 in May. The latest figure, however, was slightly weaker than -11.3 expected.
French industrial production recovered strongly at a faster than expected pace in April on higher output of transport equipment, the statistical office Insee said Monday. Industrial output advanced 2.2 percent from a month ago, when it was down 0.6 percent. Economists had forecast production to rise moderately by 0.2 percent in April.
The greenback has been trading in a range around the $1.5525 level against the pound sterling, but has since dipped to around $1.5565.
The buck rebounded from a 2-month low of Y94.971 against the Japanese Yen around midday Friday and has climbed to around Y98.900 on Monday.
Japan’s gross domestic product gained a seasonally adjusted 1.0 percent in the first quarter of 2013 compared to the previous three months, the Cabinet Office said in Monday’s final revision. The headline figure was higher than last month’s preliminary reading that suggested an increase of 0.9 percent. It was also higher than the flat reading in the fourth quarter of 2012.
Japan’s consumer confidence increased more than expected in May, a survey published by Cabinet Office revealed Monday. The seasonally adjusted consumer confidence index rose to 45.7 in May from 44.5 in April. Economists had forecast the index to rise to 44.7.
Japan saw a current account surplus of 750.0 billion yen in April, the Ministry of Finance said, surging by 100.8 percent on year. The headline figure shattered forecasts for a surplus of 350.0 billion yen following the 1,251.2 billion yen surplus in March. It also blew away expectations for a more modest increase of 5.7 percent on year following the 4.3 percent contraction in the previous month.