Dollar Weakening After Disappointing Economic Reports
Washington (Feb 12) ) The dollar is losing ground against all of its major competitors on Thursday after weekly jobless claims increased more than anticipated and retail sales fell further than expected. Investor optimism for a resolution to the Greek debt problem is also driving the Euro higher.
Continuing to rebound from a recent pullback, first-time claims for US unemployment benefits unexpectedly climbed back above the 300,000 level in the week ended February 7th .
The Labor Department released a report on Thursday showing that initial jobless claims climbed to 304,000, an increase of 25,000 from the previous week's revised level of 279,000. Economists had expected jobless claims to rise to 288,000 from the 278,000 originally reported for the previous week.
With sales by gas stations showing another substantial decrease, the Commerce Department released a report on Thursday showing that US retail sales fell by more than anticipated in the month of January. The report said retail sales fell by 0.8% in January after slumping by 0.9% in December. Economists had expected sales to drop by 0.5%.
Business inventories in the US saw a modest increase in the month of December, according to a report released by the Commerce Department on Thursday, although the report also showed a notable decrease in business sales.
The report said business inventories inched up by 0.1% in December after edging up by 0.2% in November. Economists had been expecting another 0.2% increase.
Eurozone finance ministers ended their talks on Wednesday without any major breakthrough on the future course of action on Greek debt funding.
"We had an intense discussion and constructive, covering a lot of ground, also making progress, but not enough progress at this point to come to joint conclusions," Eurogroup President Jeroen Dijsselbloem said at the press conference in Brussels late Wednesday.
"We will also continue our talks on Greece and our current and future cooperation with Greece ," he said. "That is where we stand. So, there are no real conclusions, which I can share with you."
EU leaders are set to meet in Brussels today. Eurozone finance ministers will gather again on February 16 .
The dollar dropped to a 4-day low of USD1.1422 against the Euro Thursday, but has since risen back to around USD1.1395 .
Eurozone industrial production remained flat in December after expanding for three consecutive months, data from Eurostat revealed Thursday.
Industrial production remained unchanged from November, while it was forecast to grow 0.2%. The growth rate for November was revised down to 0.1% from 0.2%.
Germany's consumer prices fell for the first time since September 2009 in January and at a faster than initially estimated pace, final data from Destatis showed Thursday.
The consumer price index dropped 0.4% in January from last year, while it was estimated to fall by 0.3%. This was the first drop since September 2009 and the biggest decline since July 2009 , when prices slid 0.5%.
The Bank of England expects inflation to breach the 2% target in three years and economic growth to gain momentum. Although inflation is set to turn negative in the near term, the bank signaled an early rate hike than investors anticipate.
In the quarterly Inflation Report, released Thursday, the bank expressed readiness to take whatever action needed to ensure that inflation returns to the 2% target in a timely fashion. Any interest rate hikes would still be more gradual and limited, it said.
The BoE expects robust pace of growth seen in 2014 to be sustained in the near term. Gross domestic product is estimated to rise by 2.9% in 2015 and 2016. For 2017, the bank estimated 2.7% expansion.
The bank left 2015 GDP outlook unchanged from the previous forecast, but upgraded the outlook for 2016 from 2.6%.
The buck has plunged to over a 1-month low of USD1.5399 against the pound sterling Thursday, from around USD1.5200 this morning.
The average asking price for a house in the UK continued to increase in January, albeit at a slower pace, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday with a score of +7. That was down substantially from +12 in December, and it marked the slowest rate of growth since May 2013 .
The greenback has pulled back to around Y118.935 against the Japanese Yen Thursday, from over a 1-month high of Y120.462 yesterday.
The leading index for Japan , which measures future economic conditions, decreased slightly in December, the results of a survey by the Conference Board showed Wednesday. The Conference Board's leading economic index for Japan fell 0.2% month-on-month in December, reversing some of the revised 0.6 increase in the previous month. It was the first decline in five months.
Core machine orders in Japan climbed 8.3% on month in December, the Cabinet Office said on Thursday. That topped expectations for an increase of 2.3% following the 1.3% gain in November.
An index measuring producer prices was down 1.3% on month in January, the Bank of Japan said on Thursday, showing a score of 103.3. That missed forecasts for a fall of 0.6% following the revised 0.5% decline in December.
Source: AllianceNews
