The dollar is turning in a mixed performance Tuesday afternoon following the release of a slew of U.S. economic reports. The U.S. currency is down against the Japanese Yen after the results of the Bank of Japan meeting were announced. The buck is rising against the British pound, but is nearly unchanged in comparison to the Euro.
Investors are anxiously awaiting tomorrow’s statement from the Federal Reserve, after it concludes its 2-day policy meeting. The Fed is not expected to announce an interest rate hike tomorrow, but investors will be paying close attention to the language of the statement for any clues regarding future rate increases.
The Bank of Japan refrained from expanding its monetary stimulus as policymakers await to see the impact of the negative interest rate introduced in January.
Governor Haruhiko Kuroda and his board members decided by an 8-1 majority vote to hold its target of raising the monetary base at an annual pace of about JPY 80 trillion.
Policymakers voted 7-2 to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.
The bank said it would take additional easing measures if needed for achieving the price stability target.
If there is a need to act, the central banks do not need to confirm the full impact of negative interest rates, Bank of Japan Governor Haruhiko Kuroda said at the press conference on Tuesday.
Kuroda said the effect of the negative policy rate is feeding into the economy and prices.
The dollar dropped to a low of Y112.604 against the Japanese Yen Tuesday, from around Y114 this morning, but has since bounced back to around Y112.985.
Japan’s industrial production increased as initially estimated at the start of the year, after falling in the previous two months, final figures from the Ministry of Economy, Trade and Industry showed Tuesday.
Industrial production rose a seasonally adjusted 3.7 percent month-over-month in January, confirming the flash data, reversing a 1.7 percent fall in December.
Reflecting another steep drop in energy prices, the Labor Department released a report on Tuesday showing a modest decline in producer prices in the month of February. The Labor Department said its producer price index for final demand fell by 0.2 percent in February after inching up by 0.1 percent in January. The modest drop matched economist estimates.
Retail sales in the U.S. saw a modest decrease in the month of February, according to a report released by the Commerce Department on Tuesday.
The report said retail sales edged down by 0.1 percent in February after falling by a revised 0.4 percent in January. Economists had expected sales to dip by 0.1 percent compared to the 0.2 percent drop originally reported for the previous month.
New York manufacturing activity unexpectedly expanded in the month of March, according to a report released by the Federal Reserve Bank of New York on Tuesday. The New York Fed said its general business conditions index jumped to a positive 0.6 in March from a negative 16.6 in February. A positive reading indicates growth in the manufacturing sector.
The sharp jump by the index came as a surprise to economists, who had expected the index to increase but remain at a negative 11.3.
Homebuilder confidence in the U.S. held at its lowest levels in almost a year in March, the National Association of Home Builders revealed in a report on Tuesday. The report said the NAHB/ Wells Fargo Housing Market Index came in at 58 in March, unchanged from February. Economists had expected the index to inch up to 59.
Business inventories in the U.S. saw a modest uptick in the month of January, according to a report released by the Commerce Department on Tuesday. The report said business inventories inched up by 0.1 percent in January following a revised unchanged reading in December.
Economists had expected inventories to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.
The buck is hovering around the $1.11 level against the Euro Tuesday and is little changed on the day.
Eurozone employment continued to increase in the fourth quarter, figures from Eurostat showed Tuesday. The number of employed persons grew 0.3 percent sequentially, the same rate of growth as seen in the third quarter. There were 151.9 million employed in the euro area.
French inflation turned negative as expected for the first time in nearly a year during February, final data from the statistical office INSEE showed Monday. Consumer prices dropped 0.2 percent, offsetting January’s 0.2 percent increase. The annual rate matched flash estimate.
The greenback has climbed to a 3-session high of $1.4145 against the pound sterling this afternoon, from around $1.4280 this morning.
The Bank of England will hold its policy meeting on Thursday.
The material has been provided by InstaForex Company – www.instaforex.com