The dollar is losing ground against the Euro Friday afternoon, but is posting modest gains against both the British pound and the Japanese Yen. The question of when the Federal Reserve will begin to hike interest rates has been a topic of great debate in recent days. Yesterday’s Fed minutes were viewed as dovish, leading many to speculate that the Fed may decide to keep rates unchanged until the start of the new year or perhaps beyond. Meanwhile, Dennis Lockhart made statements to the contrary this morning.
The minutes showed that Fed members were concerned about global growth risks and decided it was prudent to wait for additional information before raising interest rates. Combined with recent jobs and trade data, the minutes helped reinforce the view that the Fed will not raise rates later this month and may delay its first rate hike into next year.
However, Federal Reserve Bank of Atlanta President Dennis Lockhart said Friday that the Federal Reserve remains on track to raise interest rates before year’s end. Lockhart feels the U.S. economy has enough momentum to withstand China’s slowdown and gradual interest rate hikes.
Import prices in the U.S. saw a modest decrease in the month of September, according to a report released by the Labor Department on Friday, with a drop in non-fuel prices offsetting a rebound in fuel prices.
The report said import prices edged down by 0.1 percent in September after tumbling by a revised 1.6 percent in August. Economists had expected import prices to fall by 0.4 percent.
The report also said export prices dropped by 0.7 percent in September after slumping 1.4 percent in August. The decrease was much steeper than the 0.2 percent drop expected by economists.
With an increase in inventories of durable goods partly offset by a drop in inventories of non-durable goods, the Commerce Department released a report on Friday showing only a slight uptick in U.S. wholesale inventories in the month of August.
The Commerce Department said wholesale inventories inched up by 0.1 percent in August following a revised 0.3 percent drop in July. The modest increase in inventories matched economist estimates.
The dollar has dropped to a 3-week low of $1.1365 against the Euro Friday afternoon, from around $1.1280 this morning.
French industrial and manufacturing output expanded at the fastest pace in more than two years in August, data from the statistical office Insee showed Friday.
Industrial production grew 1.6 percent on a monthly basis in August, reversing a 1.1 percent fall in July. It was the fastest growth since April 2013, when it climbed 2.1 percent. Growth also exceeded a 0.6 percent rise forecast by economists.
The buck hit over a 2-week low of $1.5383 against the pound sterling early Friday, but has since bounced back to around $1.5330.
The U.K. visible trade deficit narrowed in August as car exports increased from July, the Office for National Statistics reported Friday. The deficit on trade in goods fell to GBP 11.1 billion from GBP 12.2 billion in July. It was expected to fall to GBP 9.9 billion.
British construction output unexpectedly declined for a second straight month in August at its fastest pace since late 2012, figures from the Office for National Statistics showed Friday. Construction output dropped 4.3 percent from July, when it fell 1 percent. Economists had expected a 1 percent gain. The pace of decline was the fastest since December 2012, when output decreased 5.1 percent.
The greenback has climbed to Y120.265 against the Japanese Yen this afternoon, from around Y119.950 this morning.