The dollar is losing ground against all of its major competitors on Wednesday. Investor concerns over a potential U.S. military strike on Syria continued to ease after President Barack Obama asked Congress to delay its vote on military action. The easing tensions have sparked an increase in the risk appetite of investors.
In his speech to the American public Tuesday evening, President Obama continued to call for the regime of Syrian President Bashar al-Assad to be held accountable for the alleged use of chemical weapons. However, he asked Congress to delay a vote on taking military action in order to allow a new round of diplomatic efforts to play out.
Syria agreed to a Russian proposal to give up its chemical weapons yesterday, although President Obama said it is too early to tell whether the offer will succeed. However, he vowed to keep U.S. military forces in position to respond if diplomacy fails.
Wholesale inventories in the U.S. increased by less than expected in the month of July, according to a report released by the Commerce Department on Wednesday. The Commerce Department said wholesale inventories inched up by 0.1 percent in July following a 0.2 percent decrease in June. Economists had expected inventories to rise by 0.3 percent.
Greece will require more assistance and its problems were not at the end, European Central Bank Governing Council Member Luc Coene told Belgian radio La Premiere radio on Wednesday.
“We will need to make extra efforts, certainly once, perhaps twice more,” Coene said.
The French government on Wednesday said it will not meet earlier budget deficit targets this year and next due to slower economic recovery. In the 2014 budget, Finance Minister Pierre Moscovici trimmed the economic growth estimate for 2014 to 0.9 percent from 1.2 percent.
The budget deficit for 2014 is seen at 3.6 percent of GDP, instead of 2.9 percent. He said the 2013 shortfall will be 4.1 percent compared to previous forecast of 3.7 percent.
The dollar rose to an early high of $1.3243 against the Euro on Thursday, but has since dropped to nearly a 2-week low of $1.3313.
Germany’s inflation slowed as initially estimated in August, final data released by Destatis showed Wednesday. Consumer prices advanced 1.5 percent, after rising 1.9 percent in July and 1.8 percent in June. On a monthly basis, the consumer price index remained flat in August. The statistical office, thus confirmed the provisional results released on August 29.
Employment in France’s non-farm sector decreased modestly in the second quarter after staying steady in the March quarter, data released by statistical office Insee showed Wednesday. The number of employees in the market sector, excluding the farm division, decreased 0.2 percent sequentially to around 15.93 million in the second quarter, after staying broadly unchanged in the previous quarter.
The French current account deficit widened sharply in July mainly due to an increase in trade deficit, the Bank of France reported Wednesday. The shortfall surged to EUR 3.2 billion in July from EUR 1.8 billion in June.
The greenback reached an early high of $1.5718 against the pound sterling Wednesday, but has since plunged to a 7-month low of $1.5825.
Britain’s unemployment rate fell to the lowest level since late 2012 and jobless claims declined more-than-expected to the smallest since February 2009, adding to signs that the recovery has started creating employment and further suggesting an early interest rate hike from the central bank.
During the three months to July, the ILO unemployment rate came in at 7.7 percent, down 0.1 percentage point from the February to April period, labor market statistics published by the Office for National Statistics showed Wednesday. The rate was slightly below the expected 7.8 percent and was the lowest since September to November 2012.
At the same time, the number of people claiming jobseeker’s allowance decreased by 32,600 to 1.40 million in August, the smallest in more than four years. The decline far exceeded consensus for a fall of 21,000 and follows a revised 36,300 decrease in July.
A leading indicator of British economic activity rebounded in July after a decline in the previous month, signaling continued, but moderate expansion of the economy during the rest of the year. The Conference Board said Wednesday that its leading economic index (LEI) increased 0.7 percent in July, after falling 0.3 percent in June and increasing 0.1 percent in May.
Bank of Japan policy board member Koji Ishida reportedly said Wednesday that a strong rebound in exports is needed to sustain the ongoing recovery of the economy. Japan’s recovery now is supported by domestic demand – personal consumption, housing and government spending, Ishida said in a speech in Aomori, northern Japan.
But going forward, exports must play a bigger role in driving growth, he said.
The buck climbed to an early high of Y100.601 against the Japanese Yen on Wednesday, but has since retreated to around Y100.075.
An index measuring the prices of domestic corporate goods was up 0.3 percent on month in August, the Bank of Japan said on Wednesday, standing at 102.5. That missed forecasts for a gain of 0.4 percent following the upwardly revised increase of 0.6 percent in July.
Sentiment among large Japanese firms brightened in the three months through September, results of a joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office, showed Wednesday.
The headline business sentiment index for companies with capital of over JPY 1 billion rose to 12 in July-September from 5.9 in April-June. Companies’ expectations for the coming months were also firm, but less upbeat than in the current quarter.