The dollar is rising against all of its major competitors Monday afternoon, following the lackluster performance of the previous trading week. Geopolitical concerns are playing a minor role following the terrorist attacks in Paris late Friday. Economic data is another factor, after Japan re-entered recession in the third quarter.
There was little U.S. economic data to drive trading at the start of the new trading week. Manufacturing performance in New York State continued to contract in November, new stats revealed on Monday. Figures showed a slightly slower decline for the month, but the improvement was not as strong as economists had predicted.
The New York Federal Reserve said its Empire State index came in at negative 10.7 for November. This compared to a reading of negative 11.36 for the previous month. Economists had expected the figure to improve to negative 5.0 for November.
Investors can look forward to the release of the consumer price index on Tuesday, as well as industrial production and homebuilder confidence. Housing starts are slated for Wednesday, while the Philly Fed index and weekly jobless claims data are scheduled for Thursday.
The dollar slipped to an early low of $1.0758 against the Euro Monday, but has since climbed to around $1.0690.
Eurozone inflation turned positive in October, thanks to a slower pace of decline in energy prices, latest data revealed Monday. Consumer prices edged up 0.1 percent from a year ago, reversing a 0.1 percent fall in September, final data from Eurostat showed. The statistical office initially estimated nil growth for October.
Headline inflation remains well below the European Central Bank’s target of ‘below, but close to 2 percent’. ECB President Mario Draghi last week said the return of inflation is likely to take more time than expected earlier.
Draghi also reiterated that the bank is set to review its stimulus measures in December. He strongly hinted that the bank may boost its stimulus at the meeting on December 3.
The buck reached a early high of $1.5179 against the pound sterling Monday, but has since eased back to around $1.5210.
House prices in the United Kingdom decreased in November, the latest house price balance from property tracking website Rightmove showed on Monday. The house price index fell 1.3 percent month-over-month in November, which was the smallest drop since 2011.
The greenback dropped to a 1-week low of Y122.297 against the Japanese Yen Monday morning, but has since risen to a 3-session high of Y123.200.
Japan’s economy entered a technical recession in the third quarter largely due to weak corporate investment, strengthening calls for additional monetary stimulus.
Gross domestic product declined by an annualized 0.8 percent in the third quarter, data published by the Cabinet Office revealed Monday. Technical recession is defined as two consecutive quarters of contraction in GDP.
The economy had contracted 0.7 percent in the second quarter, which was revised from previously estimated 1.2 percent fall. The rate of decline in the third quarter GDP was bigger than the expected 0.2 percent fall.
Nonetheless, Economy Minister Akira Amari today said he expects the economy to recover in the fourth quarter. Prime Minister Shinzo Abe aims to expand nominal GDP by 20 percent by 2020.
The material has been provided by InstaForex Company – www.instaforex.com