The dollar was up against all of its major rivals in early trade Wednesday, but has pared those gains in the afternoon. Investors continue to sift through a slew of U.S. economic reports. The high number of reports was necessitated by Thursday’s thanksgiving holiday and Friday’s shortened trading session.
Reflecting a jump in demand for transportation equipment, the Commerce Department released a report on Wednesday showing that new orders for U.S. manufactured durable goods increased by much more than expected in the month of October.
The Commerce Department said durable goods orders jumped by 3.0 percent in October after falling by a revised 0.8 percent in September. Economists had expected orders to increase by 1.5 percent compared to the 1.2 percent drop that had been reported for the previous month.
The number of people filing for first-time unemployment claims dropped more than expected last week, falling to its lowest level in almost a month. The figure remains just above the multi-decade low it reached this summer.
The U.S. Department of Labor revealed that initial jobless claims came in at 260,000 for the week ended November 21. This was down 12,000 from the revised level of 272,000 recorded in the previous week. Economists had expected jobless claims to come in at 270,000.
While the Commerce Department released a report on Wednesday showing that U.S. personal income rose in line with estimates in the month of October, personal spending increased less than expected.
The report said personal income climbed by 0.4 percent in October after edging up by an upwardly revised 0.2 percent in September. The increase matched expectations.
Meanwhile, the Commerce Department said personal spending inched up by 0.1 percent in October, matching the uptick seen in the previous month but coming in below expectations for 0.3 percent growth.
After reporting a sharp pullback in U.S. new home sales in the previous month, the Commerce Department released a report on Wednesday showing that new home sales rebounded in October. The report said new home sales jumped 10.7 percent to an annual rate of 495,000 in October after slumping 12.9 percent to a revised 447,000 in September.
Economists had expected new home sales to climb to a rate of 499,000 from the 468,000 originally reported for the previous month.
Consumer sentiment in the U.S. improved by less than previously estimated in the month of November, according to a report released by the University of Michigan on Wednesday. The report said the final reading on the consumer sentiment index for November came in at 91.3 compared to the preliminary reading of 93.1.
The downward revision came as a surprise to economists, who had expected the index to be unchanged from the preliminary reading.
The European Central Bank is reportedly mulling the implementation of a two-tier charge on banks parking their cash with the ECB and widen its bond buying program.
The ECB officials considered various options, including the buying of bonds of towns and regions, as well as charging a two-tier penalty on banks amassing money with the ECB, Reuters reported. They even discussed the purchase of rebundled loans at risk of non-payment in preparatory meetings, although such a measure looks unlikely for the time being, it added.
The dollar climbed to a high of $1.0565 against the Euro Wednesday, but has since eased back to around $1.0610.
French consumer sentiment remained unchanged in November, survey data from the statistical office Insee showed Wednesday. The consumer confidence index came in at 96, the same as in October. It was expected to fall to 95 in November.
The UK economy is set to grow faster than earlier expected in the next two years as investments are projected to improve, UK Chancellor of the Exchequer George Osborne said Wednesday. The chancellor also abandoned the controversial move to make changes in tax credits, citing better public finances.
Based on forecasts from the Office for Budget Responsibility, the economy is set to expand 2.4 percent next year, Osborne said in his Spending Review and Autumn Statement speech in the UK Parliament. That was higher than the 2.3 percent growth predicted in July.
For 2017, the growth forecast was lifted to 2.5 percent from 2.4 percent. In the long term, growth was forecast at 2.4 percent in 2018 and 2.3 percent in 2019 and 2020.
The growth projection for this year was retained at 2.4 percent.
“Growth…is more balanced than in the past; whole economy investment is set to grow faster in Britain than in any other major advanced economy – this year, the next year, and the year after that,” Osborne said.
The buck set an early high of $1.5055 against the pound sterling Wednesday, but has since turned negative on the day, dropping to around $1.5125.
U.K. mortgage approvals increased in October and gross mortgage lending reached a seven year high, the British Bankers’ Association said Wednesday. The number of mortgages approved in October rose to 45,437 from 44,825 in September. It was also below the expected level of 44,500.
Japan has continued to see a moderate recovery, the Bank of Japan said Tuesday in its monthly report on the economy. However, the central bank warned that certain aspects of the economy have been impacted by a slowdown in the emerging world.
The Bank of Japan said that exports and industrial production have been basically flat as a result of the slowdown in emerging economies. Elsewhere, there has been growth at a moderate pace in advanced economies, the bank said.
Looking ahead, the Bank of Japan said it expects the country’s economy to continue to show a moderate recovery.
Bank of Japan policymaker Sayuri Shirai said core inflation is likely to rise to the 2 percent target by around spring 2017, a delay of about a quarter from the official projection.
Core inflation will accelerate and reach about 1.7-1.8 percent, or rise closer to around 2 percent from the January to March 2017 to the April-June quarter, Shirai said Wednesday.
For the fiscal 2015, core inflation will be around zero percent, central banker said. This slight downward revision to outlook was attributed to the fall in crude oil prices.
The greenback rose to high of Y122.934 this morning, but has since retreated to around Y122.745.
Producer prices in Japan were up 0.5 percent on year in October, the Bank of Japan said on Wednesday. That was shy of forecasts for an increase of 0.6 percent following the downwardly revised 0.5 percent increase in September.
The leading index for Japan, which measures the future economic activity, decreased less than initially estimated in September, latest figures from the Cabinet Office showed Wednesday. The leading index fell to 101.6 in September, which was revised up from the preliminary estimate of 101.4. In August, the reading was 103.5.
Confidence among Japan’s small and medium-sized enterprises increased in November, after falling in the previous month, survey figures released by the Shoko Chukin Bank showed Wednesday. The small business confidence index climbed to 49.9 in November, the highest since March this year, from 48.7 in the previous month. In September, the reading was 49.0.
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