The dollar is turning in a mixed performance against its major rivals at the end of the trading week. Trading action has been more subdued today, following yesterday’s sharp swings.
The U.S. currency initially climbed against all of its main competitors after the European Central Bank announced a massive stimulus package yesterday. However, this was quickly followed up by a sharp reversal which brought the buck to its lowest level in weeks against the Euro and the British pound.
In its latest round of stimulus, the ECB announced a raft of measures for the euro area economy on Thursday, cutting all of its three key interest rates and expanding its asset purchase programme, among others.
U.S. economic remained sparse on Friday, as it has been throughout the week. Import prices in the U.S. saw a continued decrease in the month of February, according to a report released by the Labor Department on Friday, although the drop in prices was not as steep as economists had anticipated.
The Labor Department said its import price index dipped by 0.3 percent in February after tumbling by a revised 1.0 percent in January. Economists had expected import prices to fall by 0.8 percent compared to the 1.1 percent decrease originally reported for the previous month.
The report also said the export price index dropped by 0.4 percent in February after sliding by 0.8 percent in January. Economists had expected export prices to decline by 0.5 percent.
The dollar bounced back to $1.1080 Friday morning, from Thursday’s 3-week low of $1.1217, but has since slipped back to around $1.1160.
Germany’s consumer prices remained unchanged in February from a year ago as initially estimated, final data from Destatis showed Friday. The consumer price index was unchanged after rising 0.5 percent in January and 0.3 percent in December.
Germany’s wholesale prices declined at the fastest pace in a year in February largely due to a sharp decrease in fuel prices, Destatis said Friday. Wholesale prices dropped 1.9 percent year-on-year versus 1 percent decrease in January. The index has been falling since July 2013. It was the biggest decline since February 2015.
The British Chambers of Commerce on Friday downgraded its economic growth outlook citing weaker than expected expansion across most sectors, reflecting a general global slowdown.
In its Quarterly Economic Forecast, the BCC lowered its U.K. GDP growth forecast to 2.2 percent from 2.5 percent this year. For 2017, the lobby forecast 2.3 percent growth instead of 2.5 percent.
Lower than predicted actual growth in the fourth quarter of 2015, and downward revisions of earlier ONS figures for the first three quarters of 2015, also contributed to the downgrade, BCC said.
The buck dropped to a 3-week low of $1.4436 against the pound sterling Friday, but has since rebounded to around $1.4380.
The U.K. visible trade deficit narrowed in January due to a decrease in imports, the Office for National Statistics showed Friday. The deficit on trade in goods decreased to GBP 10.3 billion, in line with expectations, from GBP 10.5 billion in December. The narrowing was driven by a GBP 0.2 billion decrease in imports.
U.K. construction output dropped in January due to a decline in all new work, the Office for National Statistics said Friday. Construction output decreased 0.2 percent in January from December as expected by economists. All new work dropped 0.8 percent, while all repair and maintenance increased 0.8 percent.
Britons’ inflation expectations for the year ahead fell to the lowest level in more than 16 years in February, results of a quarterly survey from the Bank of England showed Friday. Inflation is forecast to be 1.8 percent in the coming year compared with 2 percent predicted in November. This was the lowest inflation expectations since November 1999.
The greenback has bounced back to around Y113.735 against the Japanese Yen this afternoon, from yesterday’s low of around Y112.600.
Japan’s business confidence weakened notably in the first quarter, a quarterly survey from the Ministry of Finance and the Cabinet Office, showed Friday. The business survey index for large manufacturers came in at -7.9, compared to +3.8 in the prior quarter. The confidence is forecast to improve in the second quarter, with the reading rising to -3.5.
The material has been provided by InstaForex Company – www.instaforex.com