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Forex

The U.S. dollar was affected on the back of weak reports on the U.S. housing market

February 20, 2014, Thursday, 12:16 GMT | 07:16 EST | 17:46 IST | 20:16 SGT
Contributed by Forex-Metal

Asian and European trading sessions:

British Pound: Pound fell against the U.S. dollar, which was a reaction to the British report. Data that has been submitted by the Office for National Statistics showed that the UK labor market continued to strengthen in recent months in 2013 , in favor of which said revenue growth and a decline in the number of applications for unemployment benefits. However, an unexpected rise was recorded in the unemployment rate in the three months (December) compared with the previous three-month period. It serves as a reminder that the economic recovery is not as strong or balanced, says the Bank of England.

According to the report, the unemployment rate rose to 7.2 % in the three months (December), compared with 7.1% in the previous three months (November). However, the latter result was significantly lower than the 7.6% in the third quarter. It was also reported that the number of unemployed fell by 125,000 over the last three months of 2013. Increasing unemployment surprised economists, as they expected that this figure will remain the same.

Average growth of regular income , except for bonuses , in the three months to December rose by 1.0 % compared with 0.9 % in the previous three-month period , recording the largest increase since June last year . Moreover, it became known that the level of unemployment claims for employment fell in January to reach 3.6% from 3.7 % in December, showing the 15th consecutive monthly decline and reached its lowest level since December 2008. The GBP / USD pair fell to $ 1.6633 during the European session.

Japanese Yen: The yen rose against the U.S. dollar. This was associated with the release of the monthly report of the Bank of Japan. It says that the Japanese economy will continue to recover at a moderate pace in the near future, with the support of the further improvement of industrial production and foreign demand. The Bank of Japan, however, warned that economic growth will depend on the increase and subsequent decrease in demand before and after the increase in the consumption tax, which will be introduced in April this year. Adverse events in emerging markets, the European debt crisis and the pace of the U.S. economic recovery also pose risks to economic growth in Japan, according to the monthly report. Exports are expected to increase slightly, mainly to a recovery in overseas economies, says the Bank of Japan. At the same time, industrial production will continue to grow (albeit at a moderate pace) on a background of stability and strength of private consumption, investments in the housing market. The USD / JPY pair fell to Y101.86 during the European session.

Swiss Franc: The Franc fell slightly against the U.S. dollar, as the report of Switzerland was worse than expected. Note that Swiss economic expectations retreated from the highest level in more than three and a half years in February, as financial analysts have become more cautious amid slowing growth in major export markets for the Alpine country. A study conducted by the ZEW Institute and Credit Suisse Group, showed that investors' expectations index fell to 28.7 points in February, compared to 36.4 points in January ( the highest since May 2010) . Recall, a positive value indicates that the number of participants who expect to improve the economic outlook is higher than the number of those who expect that they will deteriorate. While recent data from the ZEW contrasted with the Swiss PMI, increasing more than expected in January, and an early indicator of KOF, which rose to its highest level in two and a half years last month. They pointed out that economic growth in the euro area begins to support the demand for Swiss industrial goods , and it should stimulate the economy in the next six months.


American trading session:

U.S. Dollar: The rate of the dollar was affected on the back of weak reports on the U.S. housing market. Housing Starts fell sharply last month, a sign of "cooling" in the housing market in the United States. Decline was mainly associated with abnormally cold weather in large parts of the country.

The report of the Ministry of Commerce said that in January, housing starts fell by 16% to a seasonally adjusted, while reaching 880 thousand units. The figure for December was revised upward to reach 1.048 million units. At the head of the January decline were single-family housing bookmarks, which decreased by 15.9 % - up to 573 thousand in annual terms. Meanwhile, the number of building permits, which is an indicator of future construction, fell 5.4% to a seasonally adjusted - up to 937 thousand, compared to a revised figure for December at the level of 991 thousand units. Economists forecasted that housing starts dropped to 943 thousand, and the number of building permits decreased to 973 thousand

Gold: The gold prices retreated on Tuesday marked a maximum of 3, 5 months amid profit-taking and reduce purchases in the physical market. The cost of the April gold futures on the COMEX today dropped to $ 1314.25 per ounce.

Oil: The cost of WTI crude oil is kept at close to $ 103 level on the background of continuing severe weather conditions in the United States. March futures price for WTI traded in the range $ 102.38- $ 103.35 per barrel on the NYMEX.