23 August, 2013
The US dollar had grown by the end of Thursday Vs most major currencies after the publication of July FOMC Meeting Minutes that showed that almost all Fed leaders were ready to start tapering off QE already in 2013 although the start terms were not clarified. Most of all the dollar rose against the yen, dropped against the Australian dollar and almost didn’t change against the euro amid the release of positive macrostatistics from China and euro-zone. Thursday US statistics data were also mainly positive despite some worsening of labour market data.
Unemployment Claims rose by 13 thousand last week up to 336 thousand while a smaller growth to 330 thousand was expected. Last week data were also revised for the worse by 3 thousand. However, an average number of claims for the past 4 weeks – the reading that smoothes volatility – dropped by 2.25 thousand to 330.5 thousand, the lowest reading since November, 2007.
The US Manufacturing PMI rose in August to its high for five months as employment and new orders growth accelerated. Flash Manufacturing PMI rose to 53.9 in August against the final July reading 53.7. Kansas City Fed Manufacturing PMI also grew as companies’ demand for labour is increasing for the first time in six months.
Kansas City Fed Manufacturing Activity Index rose in August to 8 from 6 in July – the highest reading since February, 2012. CB Leading Index rose by 0.6% in July having exceeded the forecast after zero changes prior month. FHFA House Price Index grew by 0.6% in June also having exceeded the forecast. FOMC Member Richard Fisher making speech on Thursday repeated that reducing bond purchasing should be started in September.
The euro was traded downwards but by the end of the day it almost hadn’t changed. Some support was provided by the euro-zone PMI which not just rose but also turned out much better than expected signaling that European economic recovery was gathering pace. Euro-zone Flash Composite PMI rose in August to 26-month high of 51.7 Vs 50.5 in July having exceeded the expectations of 50.9. Flash Manufacturing PMI of Germany reached 25-month high. Only French indicators turned out worse.
Euro-Zone Flash Composite PMI
The Australian dollar rose after the release of positive Chinese macrostatistics. HSBC Flash Manufacturing PMI, a key indicator of manufacturing PMI, grew to 50.1in August from 47.7 in July having exceeded the level of 50 points and having turned out significantly better than expected. The activity turned out the highest for the past four months after July fall to the lowest reading in 11 months, which indicates that the second world’s economy could maintain after 2-quarter decrease.
HSBC Flash Manufacturing PMI
The yen decreased significantly amid the stock indexes growth after the release of Chinese and euro-zone positive statistics. DJIA has grown for the first time after 6-day fall. The Canadian dollar weakened considerably on the back of a weak report on retail sales which dropped by 0.6% m/m in June having exceeded the expectations. Core Retail Sales fell by 0.8% compared with the prior month while no changes were expected.
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