The dollar is currently turning in a mixed performance against its major competitors Tuesday. The U.S. currency is holding on to gains against the Euro, but is down slightly against both the pound sterling and the Japanese Yen. U.S. economic data was largely positive today, with consumer confidence and the S&P/Case-Shiller results both topping expectations. However, the Chicago PMI data came in weaker than anticipated.
With Denver, Miami, and Dallas pacing the gains, Standard & Poor’s released a report on Tuesday showing that home prices in major U.S. metropolitan areas increased at a faster annual rate in the month of January.
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Business activity in the Chicago area unexpectedly continued to contract in the month of March, according to a report released by MNI Indicators on Tuesday. MNI Indicators said its Chicago business barometer edged up to 46.3 in March from 45.8 in February, although a reading below 50 continues to indicate a contraction.
Economists had expected the business barometer to show a more significant rebound to a reading of 51.5, which would have indicated modest growth. Consumer confidence unexpectedly rebounded in the month of March, the Conference Board revealed in a report on Tuesday, with the increase driven by an improved short-term outlook for both employment and income prospects.
The Conference Board said its consumer confidence index jumped to 101.3 in March from an upwardly revised 98.8 in February. The increase came as a surprise to economists, who had expected the index to edge down to 95.5 from the 96.4 originally reported for the previous month.
Jeffrey Lacker, the president of the Richmond Fed, said Tuesday that he expects the Fed to start raising interest rates in the near future.
“Given the improvements in the labor market and other indicators, June will likely be an appropriate time to raise the federal funds rate target,” Lacker wrote ahead of speech prepared for delivery to the Greater Richmond Chamber of Commerce.
“I expect that, unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting.”
He said that while inflation is currently subdued, he expects consumer prices to heat up as the dollar’s recent rally loses steam.
“Energy prices are unlikely to fall forever – indeed, it looks as if they may have bottomed out for now. If so, headline inflation is also likely to begin moving back toward 2 percent this year.”
The dollar is hovering around the $1.0730 level against the Euro Tuesday afternoon, after climbing from around $1.0845 in early trade.
The Eurozone unemployment rate dropped in February to the lowest since May 2012 as companies stepped up employment amid strengthening confidence. Nonetheless, the jobless rate remained at an elevated double-digit level.
The unemployment rate fell to a seasonally adjusted 11.3 percent in February from a revised 11.4 percent in January, data published by Eurostat, the statistical office of the European Union, showed Tuesday. This was the lowest rate since May 2012. Economists had forecast the rate to remain at January’s originally estimated rate of 11.2 percent.
Although Eurozone inflation remained negative for the fourth consecutive month, the price decline in March was the slowest for the period, the flash estimate from Eurostat showed Tuesday. The harmonized index of consumer prices fell 0.1 percent year-on-year in March, in line with expectations. It was slower than February’s 0.3 percent decline and a 0.6 percent fall seen in January.
Germany’s retail sales growth eased at a slower-than-expected pace in February, preliminary figures from Destatis showed Tuesday.
Retails sales grew 3.6 percent year-over-year in February, slower than January’s 5.0 percent climb, which was revised from a 5.3 percent increase. Economists had forecast a 3.4 percent growth for the month. It was the third consecutive monthly rise.
Germany’s jobless rate fell to a record low in March, the Federal Labor Agency reported Tuesday. The unemployment rate dropped to a seasonally adjusted 6.4 percent in March from 6.5 percent in February. The rate came in line with economists’ expectations.
Germany’s jobless rate remained unchanged in February, provisional results from Destatis showed Tuesday. The jobless rate came in at adjusted 4.8 percent in February, unchanged from the prior month. The January rate was revised down from 4.7 percent. A year ago, the unemployment rate was 5.1 percent.
The buck rose to an early high of $1.4755 against the pound sterling Tuesday, but has since retreated to around $1.4850.
The U.K. economy grew more than the prior estimate in the fourth quarter, according to the latest report released Tuesday. Gross domestic product grew 0.6 percent sequentially in the fourth quarter, revised up from 0.5 percent published on February 26, the Office for National Statistics said. The growth was thus unchanged from the 0.6 percent expansion seen in the third quarter.
The greenback has slipped to around Y119.980 Tuesday afternoon, from around Y120.365 this morning.
Japanese housing starts declined at a slower than expected pace in February, data from the Ministry of Land, Infrastructure, Transport and Tourism showed Tuesday. Housing starts dropped 3.1 percent in February from last year, slower than January’s 13 percent decline and an expected decrease of 7 percent. It fell for the twelfth consecutive month in February.
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