Currency market weekly review (February 10 - February 14, 2014)
Euro: The Germany's economy, the locomotive of E17, showed growth by 0, 4 % quarterly and by 1, 3 % in yearly terms. In addition, the eurozone economy has also showed accelerating growth by 0, 3 % quarterly and 0, 5 % yearly. Of course, the economy is showing not the most outstanding growth, but still stands on the road to recovery.
Monday: The study of confidence of European investors Sentix revealed on its Monday monthly survey research that investor confidence in the euro zone unexpectedly improved in February. The investor sentiment index rose by 1.4 points to 13.3 points. The result was higher than the projected decline to 10.3 points. The improvement was mainly due to the increase in assessment of the current situation in February. Current situation index rose to 1.8 from 0.8 in January and was positive for the first time since August 2011. At the same time, investors' expectations have risen only slightly in February to 25.5 from 25.3 in January. The euro kept data on industrial production in France. Industrial production in France increased at a slower pace in December, with growth rates gave way to the forecasts of economists showed on Monday, the latest data statistical office Insee. Industrial production grew by 0.5 % in December compared with the same month last year. Economists had expected a more rapid increase of 1 %. In November, production recorded a growth of 1.7 %.
Industrial production fell by 0.3 % compared to November, when it was recorded an increase of 1.2 %. Expectations were reducing by 0.1 %. During the three months ended in December, production increased by 0.3 % compared with the previous three-month period. Industrial production grew by 0.5 % in quarterly terms. In Insee also noted that production in the French manufacturing sector expanded by 0.9 % year on year in December. On a monthly measurement of industrial production remained unchanged after rising 0.2 % in November. The EUR / USD pair rose to $ 1.3650 during the European session.
Tuesday: The euro was moderately higher against the dollar, while investors expected the speech of new Fed head Janet Yellen . Immediately before Yellen will speak Philadelphia Fed President Charles Plosser , and it will probably pave the way in calling for a drastic reduction of bond purchases , while the unemployment situation remains favorable . Nevertheless, reducing the Fed's program is the focus of only a month later after it was launched. Submitted earlier economic data has not been unequivocally favorable. So this was the first performance for Yellen may become very active. The EUR / USD pair rose to $ 1.3678 during the European session.
Wednesday: The rate of the euro fell sharply against major currencies on the comments of the ECB representative Kera introducing negative rates. The comments collapsed the euro, which has lost more than 50 pips against the dollar in a matter of minutes. Previously, the pressure on the single currency had a report on industrial production in the eurozone. As shown by recent data on Wednesday statistical office Eurostat, industrial production in the euro area grew considerably slower pace in December, the growth rate fell short of economists' expectations. The industrial production growth fell to 0.5 % in December from a revised down 2.8 % in the previous month. Economists forecast that growth will weaken to 1.8 % from November 3 % initially announced. Production of energy fell by 1.9 % compared to December 2012. Consumer non-durable goods and durable consumer goods fell by 0.9 % and 1.2 % respectively. Meanwhile, the production of intermediate goods has increased by 3.6 %. The EUR / USD pair fell to $ 1.3564 during the European session.
Thursday: The euro rose against the U.S. dollar on a background of the ECB Monthly Report and data on inflation in Germany. The ECB in its February report indicated that inflation in the euro area should remain low for an extended period of time before it starts to gradually recover to the target of 2%. “Comparison with the monetary analysis confirms the reduced prices in the euro area in the medium term," said the ECB.
According to a study of professional forecasters, forecast HICP in 2014 was revised to 1.1 % from 1.5% previously. Forecast for 2015 was lowered to 1.4 % from 1.6 % in Q4. The forecast for 2016 was 1.7 %.
With respect to data for Germany, inflation, agreed by EU standards, remained unchanged in January, according to preliminary estimates. These are the latest data from the Federal Statistical Office. Harmonized index of consumer prices (HICP) increased by 1.2 percent per annum in January, the result was unchanged compared with the growth rate in December. Outcome corresponded to preliminary estimates. HICP fell by 0.7 percent compared to December, when it recorded a growth of 0.5 percent. Monthly changes are also consistent with preliminary estimates. The Statistical Office also reported that consumer price inflation fell to 1.3 percent in January from 1.4 percent in December, according to initial estimates. Moderation in inflation mainly reflects a downward trend in prices for mineral oil products. In contrast, the cost of electricity and solid fuel increases. In monthly terms, the consumer price index fell by 0.6 percent in early 2014. This followed an increase of 0.4 percent in December. The EUR / USD pair fell to $ 1.3687 during the European session.
US Dollar: The dollar finished the past week with losses against major opponents. The reasons can be called immediately and the increased interest in risk, and the lack of radical statements by the new head of the U.S. Federal Reserve Janet Yellen, and rather weak economic statistics, which casts doubt on the likelihood of accelerating collapse quantitative easing measures. Figures of this week showed a drop of 0.4 % m / m while the projected constant level. There were weak data on initial claims for unemployment insurance 339K against 331K the previous week. Thus, these are evidences that the labor market remains one of the weakest parts of the U.S. economy.
Monday: The dollar index suspended its five-day decline, even after January in the U.S. was created only 113 thousand jobs, and the unemployment rate fell to 6.6 % compared to 6.7% in December, said Friday the Ministry of Labour. The economists had expected an increase of the number of non-agricultural jobs in the 185 thousand unemployment fell to its lowest level since October 2008.
Tuesday: The dollar showed marked fluctuations against its competitors, and finally increased. The main focus of market participants was on the speech of Fed Chairman Janet Yellen . Speaking in the U.S. Congress with the semi-annual report on monetary policy, she noted that the situation in the labor market improved, but the economy still has a long recovery process. Yellen also supported the current policy of the FOMC and suggested that the Fed will continue at a moderate pace gradually curtail asset purchase program QE. She also noted that the achievement of targets will not mean automatic increase the federal funds rate. Rather, such progress would be to encourage the Central Bank to analyze the economic situation in order to determine at what stage the rate increase is justified. Yellen said that he sees " significant risks to the U.S. economic outlook " by the tension in the emerging markets , and did not consider politics QE factor that contributes to the formation of bubbles in the stock market , saying that the share price has risen from the average historical values only slightly.
Thursday: The dollar fell under the little impact on the U.S. data, which showed that retail sales fell 0.4 percent last month, led by a drop in car sales. Sales fell by a revised 0.1 percent in December. Economists had forecast that retail sales will be unchanged in January after rising 0.2 percent in December, which was reported earlier. Meanwhile, another report showed that the number of initial claims for unemployment benefits, a measure of layoffs, increased by 8000 and amounted to a seasonally adjusted 339,000 in the week ended February 8. The result was slightly higher than the 331,000 projected by economists. Meaning last week 331,000 remained without revision.
British Pound: The Pound rose on the background of inflation report. The real surprise was the increase in the Bank of England forecasts on growth of the economy. But the key point that supported the currency was the fact that the regulator introduced certainty to the timing of increasing the interest rate. According to the data, it will happen in the 2nd quarter of 2015. The GBP / USD pair added this week 350 points or 2.2%.
Tuesday: The British pound strengthened against the U.S. dollar, amid growth in retail sales. According to a survey released Tuesday by the British Retail Consortium (BRC), retail sales in the UK rose in January. The BRC Retail Sales Monitor showed that overall retail sales rose by 5.4 percent compared with a year earlier. Sales at stores that have been open a year or more grew by 3.9 percent per annum, said the BRC. Sales growth in same stores was much stronger than in December (0.4 percent), and is the highest since April 2011, when sales growth was 5.2 percent. Sales growth in general in December was 1.8 percent, and it was with a maximum value in March 2010. Non-food sales rose 5.1 percent in the last quarter of 2013, while sales of food rose by only 0.8 percent in Q4. Online non-food sales grew by 19 percent in January. The GBP / USD pair rose to $ 1.6470 during the European session.
Wednesday: The British pound appreciated sharply against the U.S. dollar on a background of the quarterly report of the Bank of England and the speech of the Central Bank of Carney. According to the Bank of England inflation report, published today, the Central Bank is going to keep rates at a record - low of 0.5 %, at least for another year, even if the unemployment rate / p fall to 7% threshold that, according to expectations occur in Q1 2014. The Bank of England pointed out that the British economy will grow even before the Bank would raise rates. But it is worth noting that the increase will be gradual and not to such a high level, which was celebrated before the crisis.
MPC predicted that in the last quarter of 2013 Britain's GDP to grow by 0.9 % against the previous estimate of 0.7 %. As for the remainder of 2014, the Central Bank expected to raise by 3.4 % versus 2.8 % November forecast.
As for inflation, according to expectations, in the 2nd quarter of 2015 its growth will slow to 1.7%, and then accelerate again in 2016 and will reach 1.9%. Thus, under the policy of transparency, the Bank of England will consider a number of indicators, such as an index of manufacturing activity, working hours, labor productivity and wages. The size asset purchase program will continue to be ? 375 billion, at least until the first rate increase. The GBP / USD pair rose to $ 1.6557 during the European session.
Thursday: The British pound strengthened on published data on the UK housing market, according to which in January house price balance of RICS fell to 53 %, compared with 56 % earlier in December. Recall that the index is calculated as the proportion of subtraction of respondents who reported a decline in prices, the share of those who reported an increase in prices. Nevertheless, it is worth noting that the demand for homes remains strong. “It’s no secret that we have seen a rise in prices in many parts of the country due mainly lack of objects represented in the market. Given the fact that more people are now turning to buy a home than at any time in recent years, the number of objects is simply not enough to meet demand. The result is a rise in prices in many areas, and it seems to continue for the foreseeable future "- says Peter Bolton King of the RICS. The survey also showed that the evaluators continue to expect prices to rise over the coming year. The GBP / USD pair rose to $ 1.6657 during the European session.
Japanese Yen: The USD / JPY pair attempted to resume growth, which was restrained level of Y102.70. As expected, the dollar weakened on negative retail sales data.
Wednesday: The yen traded slightly higher against the dollar, though lost some previously won positions. Little impact on the bidding had words BOJ board member Takahide Kiuchi, who reported that an extra dose of easing monetary policy to prevent a potential recession caused by the expected introduction of a sales tax in April. The USD / JPY pair dropped to Y102.22 during the European session.
Australian dollar: The Australian dollar rose to a four - week high after a positive report on real estate prices and the index of business sentiment from the National Australia Bank. In December, the number of approved loans for the purchase of residential real estate in Australia fell by 1.9%, while most economists had expected growth of 1.0%. Record low interest rates have led to an increase in the real estate industry, which helped to protect the economy, especially after the end of the ten-year investment boom in the mining industry. In turn, the January index of business conditions in Australia from NAB rose to 4 compared with 3 in December and business confidence index rose to 8 to 6.
Canadian Dollar: The Canadian dollar was down against the U.S. dollar, which has been partly due to the Report on Canada. As it became known, in Canada the number of Housing Starts fell by 3.7 % m / m to an average of 180,248 units in January. January was the result of lower than forecast analysts expecting 184,000 bookmarks. The Canadian dollar rose against the U.S. dollar, which was associated with the release of data on Canada. As it became known, Canadian prices for new homes rose slightly in December, while the increase at an annual rate showed the slowest 12-month increase in nearly four years. The prices for new homes across the country increased by 0.1 % in December on a monthly measurement. Note that prices for new homes in the previous month showed zero change. A 12 -month basis, prices rose by 1.3%, which corresponded to the market consensus forecast and represented the weakest 12-month gain since February 2010. Rising prices in monthly terms led the Greater Toronto, where the cost of a new home rose 0.2%, the largest increase since July. In 2013, the average annual increase in the price of new homes was 1.8 %, compared with 2.4 % in the previous year, and became the smallest increase since 1999.
Swiss franc: The Swiss franc rose against the U.S. dollar on the background of the earlier report, which showed that the unemployment rate remained stable at a seasonally adjusted at 3.2 % in January. Similarly, the unadjusted unemployment rate remained unchanged at 3.5 %.
In late January, there were about 153,260 people as unemployed, which are 3,823 more than compared to the previous month. Unemployment rose by 5102, compared with the corresponding period last year.
Unemployment among young people aged 15 to 24 years increased by 52 persons to 20 533 people. Nevertheless, the unemployment rate fell by 674 people compared to last year.
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