Daily Outlook Wednesday, 12 March 2014 Highlights: The dollar moved flat to higher against most major currencies in a subdued session void of major U.S. indicators, as a few investors snapped up greenback positions on dovish comments from European and U.K. monetary authorities. 1. In U.S. trading on Tuesday, EUR/USD was down 0.08% at 1.3866. 2. The euro dipped against the dollar after European Central Bank Vice President Vitor Constancio said markets missed parts of the monetary authoritys message on forward guidance last week. 3. The ECB left monetary policy on hold at last Thursday’s meeting, and refrained from implementing any new measures to shore up growth, despite forecasting below target inflation for the next few years. 4. Constancio said earlier that slack still remains in the euro zone economy, though markets missed the message in the ECBs recent statement on monetary policy. 5. The forward guidance was made more precise in relation to the existence of this slack. Unfortunately ... this was not picked up by the markets, he said. 6. He also said the central bank still had policy options available, including lower interest rates or quantitative easing, if necessary. 7. Elsewhere, the dollar was down against the yen, with USD/JPY down 0.29% at 102.97, and flat against the Swiss franc, with USD/CHF down 0.00% at 0.8778. 8. The greenback was up against the pound, with GBP/USD down 0.13% at 1.6622. 9. The pound slipped against the dollar after Bank of England Governor Mark Carney said earlier he saw room for the monetary authority to leave rates on hold for longer. 10. Speaking before parliament’s Treasury Select Committee on Tuesday, Carney said the amount of spare capacity in the economy was probably slightly higher than 1.5% of gross domestic product, indicating that the economic recovery can continue without pushing up inflation. 11. He added that there was a range of views among the bank’s monetary policy committee members on the amount of spare capacity in the economy. 12. Carney also reiterated that when rate increases do come they will be gradual. 13. Also on Tuesday, data showed that U.K. manufacturing output rose more than expected in January, but bad weather hampered the broader measure of industrial output. 14. Manufacturing production rose 0.4% in January, the Office for National Statistics reported, above expectations for a 0.3% gain, while December’s figure was revised up to a 0.4% increase from a previously reported gain of 0.3%. 15. On a year-over-year basis, manufacturing production rose 3.3%, up from 1.4% in December. 16. Industrial output rose 0.1% in January, slowing sharply after a 0.5% increase in December and was up 2.9% from a year earlier. Analysts had expected industrial output to rise 0.2% in January. 17. The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.03% at 1.1103, AUD/USD down 0.49% at 0.8977 and NZD/USD down 0.04% at 0.8469. 18. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.01% at 79.87.
Posted on: Wed, 12 Mar 2014 15:20:51 +0000
Trending Topics
Recently Viewed Topics
© 2015