Dollar Recovering After Positive Economic Reports
Washington (Mar 24) The dollar is bouncing back from early weakness against its major competitors Tuesday, following the release of some better than expected economic data. The US currency's early weakness was due to some positive European economic data and the lingering disappointment from yesterday's weak existing home sales report.
Consumer prices in the US rose in line with economist estimates in the month of February, according to a report released by the Labor Department on Tuesday, with the increase partly reflecting a rebound in energy prices.
The Labor Department said its consumer price index edged up by 0.2% in February after tumbling by 0.7% in January. The modest increase by the index matched the consensus estimate.
New home sales in the US unexpectedly increased in the month of February, the Commerce Department revealed in a report on Tuesday, with sales jumping to their highest level in seven years. The report said new home sales surged up by 7.8% to an annual rate of 539,000 in February from the revised January rate of 500,000.
The increase came as a surprise to economists, who had expected new home sales to drop to a rate of 462,000 from the 481,000 originally reported for the previous month.
The dollar slipped to a 4-session low of USD1.1029 against the Euro early Tuesday, but has since bounced back to around USD1.0920 .
Eurozone private sector grew at the fastest pace in almost four years in March as the expansion in the largest member country hit an eight-month high signaling that quantitative easing of the central bank started to take effect.
The flash composite Purchasing Managers' Index rose to 54.1 in March from 53.3 in February, flash data from Markit Economics revealed Tuesday. The index rose for the fourth consecutive month to reach the highest since May 2011 . The reading stayed above the forecast of 53.6.
Germany's private sector expanded at the strongest pace in eight months in March, flash data from Markit Economics showed Tuesday. The composite Purchasing Managers' Index rose to 55.3 from 53.8 in February. The growth has stretched to 23 months and the latest rate of expansion was the most marked since July last year.
The French private sector expanded for the second month but the pace of growth eased in March, flash survey data published by Markit Economics showed Tuesday. The flash composite output index fell to 51.7 in March from 52.2 in February.
The buck dipped to USD1.4984 against the pound sterling Tuesday morning, but has since rebounded to around USD1.4850 this afternoon.
UK inflation fell to zero for the first time on record in February on sharp declines in fuel and food prices and factory-gate prices continued its negative trend. Consumer prices remained flat in February from last year after rising 0.3% in January, the Office for National Statistics said Tuesday.
It was the first time that inflation was zero since comparable records began in 1989. Prices were expected to rise 0.1%.
House price inflation in the UK eased more-than-expected in January to its lowest level in ten months, figures from the Office for National Statistics showed Tuesday. The house price index rose 8.4% year-over-year in January, following a 9.8% increase in December. Economists had expected prices to increase by 8.9%.
The greenback fell to a 1-month low of Y119.218 against the Japanese Yen early Tuesday, but has since climbed back to around Y119.575 .
The manufacturing sector in Japan was barely in expansion in March, the latest survey from Markit Economics revealed on Tuesday, with a PMI score of 50.4. That was well shy of forecasts for 52.0, and it was down from 51.6 in February.
Confidence among Japan's small and medium-sized enterprises improved for the second straight month in March, exceeding economists' expectations, figures from the Shoko Chukin Bank showed Tuesday. The small business confidence index climbed notably to 49.8 from 46.5 in the previous month. Economists had forecast the index to rise to 48.0.
Source: AllianceNews
