The US dollar fell on Friday against all major currencies after negative statistics that showed the decrease of the US Industrial Output and Empire State Manufacturing Index. Industrial Output dropped by 0.1% in October while its growth by 0.2% was expected. Industrial output fell in the USA for the first time for the last six months.
Capacity Utilization Rate decreased by 0.2% to 78.1%. Meanwhile, processing industry (3/4 of all industrial output) rose by 0.3% having exceeded the expected growth by 0.2%. The US import prices fell in October at the fastest rate for almost a year by 0.7% m/m having exceeded the expected decrease by 0.5%.
Empire State Manufacturing Index slumped in November to minus 2.21 p. from 1.52 p. last month while a growth to 5 p. was expected. The index fell to its low for 10 months and for the first time in six months dropped below zero – the level that indicates index decline. New Orders and Shipments fell significantly as well as Employment Index. This report is the first to be released among production reports of regional banks and it is used to forecast manufacturing index in all country which is usually released at the beginning of the next month.
By the end of the week the dollar fell by 0.55% according to the dollar index leveling the same growth last week. The dollar slumped Vs all currencies except yen and Australian dollar and was put under pressure amid aroused expectations that the Fed new chair Janet Yellen will continue soft monetary policy after she enters upon the office at the beginning of the next year.
This week there will be rather a lot of US data including delayed data due to government shutdown. Fed Chairman Bernanke is due to speak at the National Economists Club on November 20 at 00:00 GMT. On Monday Treasury International Capital Flows and NAHB Housing Market Index will be released; on Tuesday - Employment Cost Index, on Wednesday – consumer Price Index, Retail Sales, Existing Home Sales and FOMC Meeting Minutes; on Thursday – Producer Price Index and Philadelphia Fed Manufacturing Index; on Friday – Job Openings.
The main events in the euro-zone will be the publication of German ZEW Economic Sentiment on Tuesday and IFO indexes on Friday; besides, preliminary Manufacturing and Non-Manufacturing PMI of France, Germany and the whole euro-zone. ZEW and IFO indexes are expected to grow in Germany as well as euro-zone PMI. On Monday euro-zone Trade Balance and Current Account will be released. In Germany on Tuesday there will be a release of Producer Price Index and on Friday – the Final GDP for the third quarter.
In the UK the BoE Meeting Minutes will be released on Wednesday and on Thursday - Public Sector Net Borrowing and CBI Industrial Order Expectations. In Japan Trade Balance will be released on Wednesday; on Thursday BoJ Interest Rate Decision will be announced. HSBC Flash Manufacturing PMI will be released on Thursday.
On Tuesday Meeting Minutes of the Reserve Bank of Australia will be published; and on Thursday RBA Governor Glenn Stevens is due to deliver a speech titled "The Australian Dollar: Thirty Years of Floating". In New Zealand Producer Price Index report will be released on Wednesday. In Canada Wholesale Sales will be released on Wednesday; and on Friday – inflation and retail sales. Bank of Canada governor Poloz will deliver a speech in the Parliament on Thursday.