Dollar Posting Modest Gains Despite Strong Retail Sales
Washington (Jun 11) The dollar is up modestly against both the Euro and the Japanese Yen Thursday, but is nearly unchanged against the pound sterling. Economic data proved mixed today, with a strong retail sales number, but an unexpected increase in weekly jobless claims.
Retail sales in the US showed a notable increase in the month of May, according to a report released by the Commerce Department on Thursday. The Commerce Department said retail sales jumped by 1.2% in May, matching economists' consensus estimate.
After reporting a modest decrease in first-time claims for US unemployment benefits in the previous week, the Labor Department released a report on Thursday showing a slight uptick in clams in the week ended June 6th .
The report said initial jobless claims inched up to 279,000, an increase of 2,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 275,000 from the 276,000 originally reported for the previous week.
With prices for fuel imports showing a substantial increase, the Labor Department released a report on Thursday showing that US import prices rose by more than expected in May.
The report said import prices surged up by 1.3% in May following a revised 0.2% decrease in April. Economists had expected import prices to climb by about 0.8%.
The Labor Department also said export prices rose by 0.6% in May after falling by 0.7% in April. Export prices had been expected to inch up by 0.2%.
Partly reflecting a notable increase in retail inventories, the Commerce Department released a report on Thursday showing that US business inventories rose by more than expected in April. The Commerce Department said business inventories increased by 0.4% in April following a 0.1% uptick in March. Economists had expected inventories to edge up by 0.2%.
Standard & Poor's Ratings Services affirmed the sovereign ratings of the US with a stable outlook, citing its credit strength.
The World Bank downgraded its global growth outlook, as developing countries face tough transition with high borrowing costs and lower commodity prices in 2015. The organization also urged the Federal Reserve to hold off raising rates until the next year, citing the risks it may pose to emerging markets.
The global economy is expected to expand 2.8% instead of the 3% estimated in January, the Washington -based lender said in its biannual Global Economic Prospects report.
The International Monetary Fund announced around midday that it has withdrawn from discussions with Greece . The IMF has departed Brussels after stating that "no progress" was being made toward an agreement.
S&P Ratings Services cut its long-term sovereign credit rating on Greece to 'CCC' from 'CCC+', citing the likelihood of the nation defaulting on its commercial debt within the next 12 months in the absence of a bailout deal with its official creditors.
The agency said the 'C' short-term rating remained unchanged, and the outlook is negative, given the risk of a further worsening of liquidity for the sovereign, its banks, and the economy. S&P also hinted that it could lower the rating again within a year if the likelihood of a distressed exchange of Greek commercial debt increases further.
The dollar climbed to a 2-day high of USD1.1182 against the Euro Thursday morning, but has since eased back to around USD1.1240 .
French consumer prices increased for the second straight month in May, in line with expectations, figures from the statistical office Insee showed Thursday. The consumer price index rose 0.3% year-over-year in May, faster than previous month's 0.1% increase. The figure was also matched with consensus estimate.
France's non-farm payroll employment remained virtually stable in the first quarter after rising in the previous quarter, preliminary data released by statistical office INSEE showed Thursday. Payroll employment in the principally market sectors, which include the manufacturing, construction and services sectors, remained stable quarter-on-quarter, following the 0.1% rise in the previous quarter.
The buck rose to an early high of USD1.5421 against the pound sterling Thursday, but has since retreated to around USD1.5500 , nearly unchanged for the day.
House prices in the UK are expected to move higher over the next three months, the latest survey from the Royal Institution of Chartered Surveyors showed on Thursday, with an index score of +34. That touches a nine-month high, and it's up from +32 in April, although it was shy of expectations for +36.
The greenback climbed to a high of Y124.125 against the Japanese Yen Thursday, but has slipped to around Y123.530 this afternoon.
Japanese manufacturers remained pessimistic in the second quarter, while confidence is expected to bounce back strongly in the coming quarter on strong consumer spending, the quarterly survey by the Ministry of Finance and the Cabinet office showed Thursday. The Business Survey Index, or BSI, came in at -6 in the April to June quarter, following a positive reading of 2.4 in the January to March period.
Source: AllianceNews
