Daily Outlook Friday, 24 October 2014 Highlights: The dollar traded largely higher against most major currencies on Thursday after upbeat U.S. weekly jobless claims numbers and third-quarter earnings bolstered demand for the greenback, though solid European data gave the euro some support. 1. In U.S. trading on Thursday, EUR/USD was unchanged at 1.2649. 2. The Department of Labor reported earlier that the number of individuals in the U.S. filing for initial jobless benefits in the week ending Oct. 18 increased by 17,000 to 283,000, broadly in line with forecasts. 3. The four-week average fell to 281,000, the lowest since May 2000, while continuing claims, which includes those receiving benefits for at least a second month in a row, also hit a 14-year low, of 2.35 million, which bolstered the U.S. currency. 4. Better-than-expected earnings from General Motors as well as Caterpillar, the latter of which hiked its profit outlook, boosted dollar demand by reminding investors that despite hiccups here and there, the U.S. economy continues to recover and will likely warrant rate hikes next year. 5. Still, the euro saw some support on upbeat European data. 6. Research group Markit Economics reported earlier that its preliminary manufacturing purchasing managers’ index for the euro area ticked up to 50.7 this month from a final reading of 50.3 in September. Analysts had expected the index to slide to 49.9. 7. The service-sector PMI held steady at 52.4, slightly above expectations of 52.0. 8. The dollar was up against the yen, with USD/JPY up 0.96% at 108.18, and down against the Swiss franc, with USD/CHF down 0.03% at 0.9535. 9. The yen has recently served as a safe-harbor asset class during times of economic and geopolitical uncertainty due to concerns that a cooling global economy may weigh on U.S. recovery and affect the timing of U.S. rate hikes next year. 10. Upbeat U.S. and European data enticed investors out of yen positions on Thursday, which sent the currency falling. 11. The greenback was up against the pound, with GBP/USD down 0.11% at 1.6033. 12. Sterling slid after official data showed that retail sales in the U.K. posted a larger-than-expected decline in September, adding to signs that the rate of the economic recovery is cooling. 13. In a report, the U.K. Office for National Statistics said retail sales decreased 0.3% last month, disappointing forecasts for a decline of 0.1%. August retail sales rose by 0.4%. 14. Year-on-year, retail sales rose at an annualized rate of 2.7% in September, below expectations for a 2.8% gain, after rising at a rate of 3.7% in August. 15. Core retail sales, which exclude automobile sales, fell 0.3% last month, worse than forecasts for a 0.2% decline, after rising 0.3% the previous month. 16. The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.02% at 1.1233, AUD/USD down 0.19% at 0.8762 and NZD/USD down 1.34% at 0.7824. 17. The kiwi fell after data showed that the country’s consumer price index rose just 0.3% in the third quarter, missing expectations for a 0.5% gain. 18. The soft data fueled speculation that the Reserve Bank could delay rate hikes. 19. The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.03% at 85.88. 20. On Friday, the U.S. is to round up the week with a report on new home sales.
Posted on: Fri, 24 Oct 2014 04:11:35 +0000
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