Daily market report IMF Raises Global Outlook as Advanced Nations Accelerate - Dollar Drops From a 4-Month High - Pound 0.2% From 1-Year High Versus Euro Before Job Data, Minutes The International Monetary Fund raised its forecast for global growth this year as expansions in the U.S. and U.K. accelerate, and urged advanced economies to maintain monetary accommodation to strengthen the recovery. The global economy will grow 3.7 percent this year, compared with an October estimate of 3.6 percent, the IMF said in revisions to its World Economic Outlook released in Washington today. U.S. gross domestic product will expand 2.8 percent, compared with 2.6 percent; Japan will gain 1.7 percent versus 1.2 percent; and the U.K. will increase 2.4 percent from 1.9 percent, the report showed. Central banks in the U.S., Japan and the euro area face inflation levels under their targets while trying to accelerate growth with policies including benchmark interest rates near zero and bond-buying programs. While it raised the outlook for advanced nations, the IMF said “downside risks remain,” including financial-market volatility in emerging markets. Olivier Blanchard, the IMF’s chief economist, said in a prepared statement that the fund expects the Federal Reserve’s benchmark interest rate will rise in 2015. The Fed announced plans last month to taper monthly asset purchases to $75 billion from $85 billion, citing improvement in the labor market. The dollar declined from a four-month high amid Treasury yields at an almost six-week low before the Federal Reserve meets next week to determine whether to continue scaling back stimulus. The U.S. currency touched the highest level since September before reports this week that economists said will show manufacturing growth accelerated while existing-home sales rebounded. The Canadian dollar weakened to the least against the greenback since 2009. The yen reached the lowest in a week as the Bank of Japan began a two-day meeting amid speculation it will extend stimulus to counter the impact of a sales-tax increase. The dollar rose 0.1 percent to 104.30 yen after adding 0.6 percent, the biggest increase since Jan. 14. The U.S. currency traded at $1.3561 per euro after adding as much as 0.3 percent. The 18-nation shared currency rose 0.2 percent to 141.43 yen. The dollar gained this year against all but three major currencies before the Fed begins a two-day policy meeting on Jan. 28 at which it may decide to continue tapering stimulus. Policy makers at their previous gathering on Dec. 18 decided to cut monthly bond buying to $75 billion from $85 billion beginning this month. They will reduce purchases by $10 billion at each meeting to end the program this year, according to economists in a Bloomberg survey conducted Jan. 10. The Markit Economics preliminary index of U.S. manufacturing climbed to 55 this month from 54.4 in December, according to the median estimate of analysts surveyed by Bloomberg News before the figure is published on Jan. 23. The National Association of Realtors may say on the same day sales of previously-owned homes climbed 1 percent last month after a 4.3 percent drop in November. The pound was within 0.2 percent of the strongest in a year versus the euro before a report economists said will show unemployment fell toward the Bank of England’s threshold for reviewing when to raise interest rates. Sterling was little changed versus the dollar after climbing to the highest level in two years this month. The jobless rate fell to 7.3 percent in the three months through November, according to a Bloomberg survey of analysts. Bank of England Governor Mark Carney said in August that policy makers wouldn’t consider increasing borrowing costs at least until unemployment dropped to 7 percent. The central bank will release minutes from its January meeting today. The pound was at 82.29 pence per euro as of 7:41 a.m. London time after appreciating to 82.15 pence yesterday, the strongest since Jan. 11, 2013. The U.K. currency traded at $1.6477, after advancing to $1.6603 on Jan. 2, the highest since August 2011. Have a good day!
Posted on: Wed, 22 Jan 2014 09:33:44 +0000
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