The dollar is pulling back from yesterday’s sharp gains against the Euro and British pound, but is only slightly off its high against the Japanese Yen. The U.S. currency surged after the release of the Federal Reserve statement yesterday afternoon, but has eased back after the release of some weaker than expected economic data.
The Federal Reserve kept interest rates unchanged on Wednesday amid internal debate about whether to have tightened monetary policy. Policy makers also signaled that a rate hike is still possible at their ‘next meeting’ in December.
Many analysts pointed to the fact that the Fed statement removed a reference to global economic and financial developments potentially restraining economic activity.
The Fed’s explicit indication that it will assess progress towards its objectives in determining whether it will be appropriate to raise rate at its “next meeting” was also highlighted.
Growth in U.S. economic activity saw a notable slowdown in the third quarter, according to a report released by the Commerce Department on Thursday. The report said real gross domestic product rose by 1.5 percent in the third quarter compared to the 3.9 percent jump seen in the second quarter. Economists had expected a 1.7 percent increase.
First-time claims for U.S. unemployment benefits saw a slight increase in the week ended October 24th, according to a report released by the Labor Department on Thursday. The report said initial jobless claims inched up to 260,000, an increase of 1,000 from the previous week’s unrevised level of 259,000. Economists had expected initial jobless claims to climb to 265,000.
Pending home sales in the U.S. unexpectedly decreased for the second consecutive month in September, the National Association of Realtors revealed in a report on Thursday. NAR said its pending home sales tumbled 2.3 percent to 106.8 in September after sliding 1.4 percent to a slightly downwardly revised 109.3 in August.
The continued decrease in pending home sales came as a surprise to economists, who had expected the index to rebound by 1.0 percent.
The dollar surged to a 2 1/2 month high of $1.0896 against the Euro yesterday, but has pulled back to around $1.0965 this afternoon.
Eurozone economic confidence improved unexpectedly in October, though slightly, survey data from European Commission showed Thursday. The economic sentiment rose to 105.9 in October from 105.6 in the previous month. Economists had expected the index to fall to 105.1.
A measure of future economic activity in Eurozone remained unchanged in September, survey figures from the Conference Board showed Wednesday. The Conference Board’s Leading Economic Index, or LEI, for the euro area showed no variations in September, following a 0.2 percent increase in August.
Germany’s consumer prices increase in October after remaining flat in the previous month, preliminary estimates from the Destatis showed Thursday. The consumer price index rose 0.3 percent annually following stagnation in September. Economists had forecast 0.2 percent increase. The latest gain was the fastest since June, when prices climbed at the same pace.
German unemployment declined more-than-expected in October, extending further evidence of the resilience of businesses in the biggest Eurozone economy, amid the slowdown in emerging markets. The number of unemployed dropped a seasonally adjusted 5,000 to 2.788 million, the Federal Labor Agency said on Thursday. Economists were looking for a decline of 4,000.
Germany’s unemployment rate held steady in September, figures from Destatis showed Thursday. The jobless rate came in at an adjusted 4.5 percent in September, the same rate as in the previous month. In the corresponding month last year, the rate was 5.0 percent.
The buck jumped to over a 2-week high of $1.5241 against the pound sterling Thursday morning, but has since eased back to around $1.5300.
U.K. house price inflation accelerated unexpectedly in October to the highest level in five months, the Nationwide Building Society said Thursday. House prices climbed 3.9 percent year-over-year in October, slightly faster than September’s 3.8 percent rise. Economists had forecast prices to remain stable at 3.8 percent.
UK loan approvals for house purchase unexpectedly dropped in September for the first time in four months from its highest level in two-and-a-half years, figures from the Bank of England showed Thursday.
The number of loans approved for house purchase totaled 68,874 in September, which was lower than August’s 70,664, revised from 71,030. Economists had forecast 72,400 approvals. The August figure was the highest since January 2014.
The greenback hit a high of Y121.253 against the Japanese Yen yesterday afternoon, but is now trading around Y121.085.
Industrial production in Japan was up a seasonally adjusted 1.0 percent on month in September, the Ministry of Economy, Trade and Industry said in Thursday’s preliminary reading. That beat forecasts for a decline of 0.5 percent following the 1.2 percent contraction in August.
The material has been provided by InstaForex Company – www.instaforex.com