The US dollar Continued to Fall

January 14, 2014

On Monday the US dollar was traded with fall Vs the most major currencies after the release of weak Non-Farm Payrolls, but rose Vs the pound, and almost didn’t change Vs the euro. AUD, NZD, and the yen continued the tendency of Friday growth. After 5-days reduction of the previous week the CAD has undergone upward correction.

There was hardly any significant statistical data in any country on Monday. The Conference Board Employment Trends Index (ETI) rose in December to 115,76 from the upwards revised November level of 115,72. The data appeared to be better than the official Employment Rate report in December. The USA budget surplus in December formed $53,2 b having exceeded the expectations at the level of $44 billion.

Fed representative Lockhart announced on Monday that Fed will continue to reduce bond purchase in case of further economy recuperation – the December Employment Rate report didn’t decrease QE3 Tapering support. Lockhart believes that the US economy growth to be high this year and may give a positive surprise – the GDP rate will grow by 2,5% - 3%. Threshold point of Unemployment rate of 6,5% is close, and perhaps Fed will have to improve the supplies marks.

The pound fell after several-days growth of the previous week, whereas the euro almost didn’t change according to the results of the day. The purchase of British oil-engineering company Amec – trading in the USA Foster  Wheeler AG for $3,2 billion – has partly influenced the reduction of the pound Vs the USD.

On Monday OECD released the forecasts of global economy development especially pointed Europe’s recuperation and its positive influence to the global growth. Economic advance will be improved in the USA, the UK, Japan and the Euro zone. Though Germany will be the main mover of the Euro zone economy recuperation as before; there are also signs of GDP growth restoration in forthcoming months in France and Italy.

According to VDMA German Industrial Group data Machinery Orders rate in Germany rose by 7% comparing to the same period of the last year due to the increased external demand – more recent evidence of gradual recuperation of the key economic sector supports this data.

The rate of the Italian Industrial Production growth slightly decreased. Manufacturing activity increased in November by 0,3% after the October growth by 0,7% which coincided with the expectations.

The calendar adjusted industrial production of Italy demonstrated positive tempo of change from August 2011.

 

The yen continued its correctional growth for the second day in a row amid the futures reduction at Nikkei almost by 2% - the Japanese markets were closed due to the holiday. Stock markets of the American session also demonstrated negative dynamics. The Dow Jones Industrial Average fell by 1,1% on Monday which appeared to be the most considerable fall from 20 September of the previous year. USDJPY pair decreased lower 103 rate for the first time since 18 December 2013.

The Australian dollar reached monthly high Vs the USD on Monday, and the New Zealand dollar almost reached the 2-months high Vs the dollar. Housing Market data of Australian appeared to be a bit better than expected – Home Loans in Australia increased in November by 1,1% m/m, and by 15,3% comparing to the previous year.

NZD strengthened its positions before the release of NZIER Business Confidence, which increased in the forth quarter to the level of 52%, comparing to 38% of the previous quarter. The index appeared to be the highest for almost 20 years from June 1994.

CAD was undergoing upward correction after 5-days decrease of the last week and almost didn’t react the quarterly BOC Business Outlook Survey. The survey didn’t demonstrate considerable improvement of the expectations, but its decrease was not pointed out. The participants of the survey hope for export and investment increase, this fact lets to expect support of the economic growth.

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