The dollar is up against all of its major competitors at the start of the new trading week, thanks to some better than expected economic data. Personal income and pending home sales both exceeded the expectations of economists. Investors will be watching for a number of important economic reports this week, including the ISM manufacturing report on Wednesday and the jobs report for March on Friday.
Personal income in the U.S. increased by slightly more than expected in the month of February, according to a report released by the Commerce Department on Monday, although the report also showed that personal spending rose by less than anticipated.
The Commerce Department said personal income climbed by 0.4 percent in February, matching the upwardly revised increase seen in January. Economists had been expecting income to rise by 0.3 percent, which would have matched the growth originally reported for the previous month.
Meanwhile, the report also showed that personal spending inched up by 0.1 percent in February after dipping by 0.2 percent in January. Spending had been expected to edge up by 0.2 percent.
Pending home sales in the U.S. increased by much more than expected in the month of February, according to a report released by the National Association of Realtors on Monday, with pending sales jumping to their highest level in twenty months.
NAR said its pending home sales index surged up 3.1 percent to 106.9 in February after climbing 1.2 percent to a slightly downwardly revised 103.7 in January. Economists had expected the index to edge up by 0.3 percent.
An interest rate hike “may be warranted” this year, as long as the U.S. economic recovery is sustained, Federal Reserve Chairman Janet Yellen said Friday afternoon.
“With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year,” Yellen said at San Francisco Fed conference.
“Of course, the timing of the first increase in the federal funds rate and its subsequent path will be determined by the Committee in light of incoming data on labor market conditions, inflation, and other aspects of the current expansion.”
Greece will present a list of economic reform proposals to international creditors today after Prime Minister Alexis Tsipras’ earlier reform plans met resistance from EU leaders. Tsipras said in remarks published Sunday he is looking for a “happy ending” in his current talks with EU creditors. “I am confident there will be a happy ending soon to this first phase of the negotiations, and to normalizing the situation,” Tsipras said.
The dollar has risen back to around $1.0820 against the Euro Monday afternoon, from a 3-week low of around $1.1050 on Thursday. The U.S. currency is currently challenging the intraday high from Friday’s session.
Eurozone economic sentiment rose for the fourth successive month to its highest level in nearly four years as lower oil prices, weak euro and measures of the central bank boosted confidence among firms and consumers, survey figures from the European Commission showed Monday.
The economic sentiment index climbed more-than-expected to 103.9 from 102.3 in February, which was revised from 102.1. Economists had expected a score of 103. The latest reading was the strongest since July 2011, when it was 104.
Germany’s consumer prices increased for the second straight month in March, preliminary data from the statistical office Destatis showed Monday. Consumer prices rose 0.3 percent from last year after increasing 0.1 percent in February. The annual increase came in line with expectations.
The buck rose to over a 1-week high of $1.4751 against the pound sterling Monday, but has since eased back to around $1.4825.
The U.K. mortgage approvals rose to a 6-month high in February, the Bank of England reported Monday. The number of mortgages approved for house purchases rose to 61,760 in February from 60,707 in January. This was the highest since August and above the expected level of 61,000.
Optimism among British financial services firms rose to its highest level in more than a year in the first quarter as profitability improved in most sectors despite weak growth in business volumes, results of a survey by the Confederation of British Industry revealed Monday.
The latest CBI/PwC Financial Services Survey showed that 59 percent of financial services firms were more optimistic than three months ago, while 9 percent were less optimistic. That gave a balance of +50 percent, which was the strongest since December 2013 when it was +68 percent.
The greenback hovered around the Y119.200 level against the Japanese Yen early Monday, but has since broken out to a 1-week high of Y120.105.
Industrial output in Japan dipped 3.4 percent on month in February, the Ministry of Economy, Trade and Industry said on Monday – falling for the first time in three months. The headline figure missed forecasts for a decline of 1.9 percent following the 3.7 percent increase in January.
The material has been provided by InstaForex Company – www.instaforex.com