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Forex

The dollar gained on risk aversion, which increased on U.S. data and prevention of the formation of bubbles made by Mr. Tarullo

February 26, 2014, Wednesday, 10:40 GMT | 05:40 EST | 15:10 IST | 17:40 SGT
Contributed by Forex-Metal

Asian and European trading sessions:

Euro: The euro rose against the dollar on GDP data in Germany. The German economy grew moderately in late 2013 as originally anticipated at the beginning of this month, final data showed Destatis. Gross domestic product increased by 0.4 % compared with the previous quarter, which is slightly faster than the expansion of 0.3 %, which is seen in the third quarter. This was in accordance with the calculation results, published on February 14. The expenditure breakdown of GDP showed that exports of goods and services grew by 2.6 % compared with the third quarter. At the same time, imports increased by no more than 0.6 %. As a result, the balance of exports and imports contributed to the growth by 1.1 % age points of GDP and is a key economic engine in the fourth quarter. Investments grew by 1.4 % in quarterly terms. Nevertheless, stocks declined significantly, leading to slower economic growth by 0.8 %age points. While government spending remained unchanged from the previous quarter, household spending on final consumption decreased slightly by 0.1 %.

In annual terms with the calendar adjusted GDP grew more than doubled to 1.4 % from 0.6 % in the third quarter. In addition, the price-adjusted GDP grew by 1.3 % compared with 1.1 % in the previous period. Results in the fourth quarter correspond to preliminary estimates. The EUR / USD pair rose to $ 1.3765 during the European session.

British Pound: The British pound rose against the U.S. dollar, supported by data and comments of the Bank of England Mr. McCafferty .  Mr. McCafferty said in an interview with Reuters on Tuesday that the first term of the Bank of England rate hike will depend greatly on the state of inflation. In the case of acceleration of its growth may increase more than previously . Yet he stressed that the projections assume the first increase in Q2, 2015, and it is quite reasonable. Moreover, McCafferty said that the current growth of the pound does not harm British exports, but if it continues, the Bank of England will be forced to react.

With regard to the published statistics, the number of mortgage approvals in the UK rose by more than expected, and reached its highest level since September 2007, data showed the British Bankers Association (BBA). Number of loans for house purchase rose to 49,972 in January, the highest level since September 2007, from 47,086 in December. The expected level was 47,150. Including re- mortgages, general statements made ??82,151 compared to 78,584 a month ago.

Another report showed that UK retail sales rose at the fastest pace since June 2012. These are the findings of research trends distributive trade from the Confederation of British Industry (CBI). About 45 % of respondents reported that sales rose compared with the previous year, while 8 % said they were down. This gave the balance 37 per cent. Retailers expect sales to grow at a steady pace in the next month - 43 % expect growth, 15 % expect a recession. The balance was 28 %. Investment intentions for the year ahead given the balance of 17 %, which is the strongest level since November 2010. Retailers also expect that their overall business situation will improve over the next three months. The GBP / USD pair rose to $ 1.6708 during the European session.


American trading session:

U.S. Dollar: The dollar gained on risk aversion, which increased on U.S. data and the prevention of the formation of bubbles made by Mr. Tarullo . Daniel Tarullo (Fed governor in charge of financial regulation), said that a small increase in risk in the credit markets, but this does not mean that in response to the central bank should raise interest rates. According Tarullo, the Fed should not exclude raising rates to combat potential "bubble” in asset markets, but it should first try to use, and then hone their regulatory tools to identify these threats to financial stability. Nevertheless, he added, raising interest rates in response to every little sign of the "bubble” will have significant negative consequences for the economy.

Report of the Federal Reserve Bank of Richmond showed in February manufacturing conditions in the region have deteriorated compared to the previous month. Corresponding index of manufacturing activity fell to 6 points in February compared to 12 in January. Economists had expected the index to rise to 13 points.

Meanwhile, a report from the Conference Board showed consumer sentiment index fell to 78.1 from 79.4 in January (revised from 80.7). Economists expected a decline to 80.2. Assess the current situation index rose from 77.3 to 81.7. This component of the index rose to its highest in nearly six years level. The expectations index fell sharply - from 80.8 to 75.7.

Gold: The Gold prices rose today, the highest in four months, after disappointing U.S. data, which increased concerns about the pace of economic recovery. The cost of April gold futures raised to $ 1341.80 per ounce on the COMEX today.

Oil: The Oil prices fell today, weighed down by forecasts of growth in U.S. oil inventories. Nevertheless, supply disruptions from Libya and other key countries to keep prices from falling further. April futures price for WTI fell to $ 101.59 a barrel on the NYMEX.