The dollar is weakening against all of its major competitors on Tuesday. Investor concerns over potential tapering of stimulus measures by the Federal Reserve are responsible for the currency’s weakness. Investors are awaiting the release of the minutes from the Federal Open Market Committee’s two-day meeting held on July 30 and 31, which are slated to be released on Wednesday. The minutes are expected to give further hints regarding the Fed’s further course of action on stimulus tapering.
The dollar traded between the $1.3325 and $1.3375 level against the Euro for the past 2 trading session, but has dropped to a 6-month low of $1.3450 on Tuesday.
Eurozone’s construction sector output increased for a third consecutive month in June, the latest data from Eurostat revealed Tuesday. Production rose 0.7 percent month-on-month in June following a 0.5 percent increase in May and a 1.3 percent growth in April.
Germany’s producer price inflation weakened in July, defying economists’ forecast for an increase, latest data showed Tuesday. The producer price index moved up 0.5 percent on an annual basis in July, following the previous month’s 0.6 percent gain, the Federal Statistical Office said. Economists had forecast growth to accelerate to 0.7 percent.
A leading indicator of German economic activity increased for a second consecutive month in June, suggesting that the economy will likely sustain the current growth momentum in the coming months, the Conference Board said in a report on Tuesday. The leading economic indicator (LEI) increased 0.2 percent month-on-month to 105.4 in June. This followed a 0.4 percent increase in May and a 0.2 percent fall in April.
Germany’s employment increased by 0.6 percent year-on-year in the second quarter, the same rate as seen in the first quarter, Destatis reported Tuesday. The number of persons in employment was up by 242,000 from the last year. Compared to the first quarter, employment surged 377,000 or 0.9 percent, as a result of the spring upturn in the second quarter of 2013. After adjusting for usual seasonal fluctuations, employment increased only by 52,000, it said.
The greenback rose to an early high of $1.5627 against the pound sterling on Tuesday, but has since fallen to a 2-month low of $1.5695.
Mortgage lending in the United Kingdom increased sharply in July, rising to the highest level in nearly five years, data released by the Council of Mortgage Lenders (CML) showed Tuesday. The gross value of mortgage loans disbursed in July increased 12 percent sequentially to GBP16.6 billion. Compared to July 2012, total mortgage lending climbed 29 percent. The value has now reached the highest level since October 2008, when it stood at GBP18.6 billion.
The buck has pulled back from yesterday’s high of Y98.115 against the Japanese Yen on Tuesday, to around Y97.025.
Japan’s all industry activity contracted for the first time in five months in June, data from the Ministry of Economy, Trade and Industry showed Tuesday. The all industry activity index dropped 0.6 percent month-on-month, reversing the 1.2 percent increase seen in May. Economists had forecast it to fall by 0.7 percent.
