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06.08.2015 18:20

American focus: the dollar fell slightly

The US dollar fell slightly against the yen and the euro, as some investors open large positions ahead of the release of the July report, the Labor Department employment. Traders expect the Friday data will clarify the situation with the terms of higher interest rates and help to determine the future direction for the dollar.

Investors expect that the dollar will rise against the currencies of developed economies as they approach the Fed to raise short-term interest rates. Many believe that the data on the number of jobs outside agriculture in the USA, which will be published on Friday, bringing the central bank to ensure that the state to tighten monetary policy at the September meeting.

Higher interest rates could lead to an increase in return on assets denominated in dollars, thus increasing the attractiveness of the currency to investors.

The Fed is closely monitoring the data on the labor market and will analyze the July report for signals on increase of salaries and the level of involvement of the population in the labor force, and will also look for signs of a decline in unemployment. Economists predict that in July, was created 218,000 new jobs, which is consistent with an improving labor market situation.

Today published statistics on initial applications for unemployment insurance have little support to the dollar. The US Labor Department reported that the number of Americans who first applied for unemployment benefits, increased moderately last week but remained at a level which indicates an improvement in the labor market.

According to the report for the week ended August 1, the number of initial applications for unemployment benefits rose by 3,000 to a seasonally adjusted and reached 270 000. Economists had expected 273,000 new claims. The figure for the previous week was not revised (267,000). It is worth emphasizing the number of calls remained below the psychological threshold of 300 000 for 22 th consecutive week.

The Ministry of Labour said that the data of recent weeks reflect some seasonal volatility, as automakers shut plants for temporary service. It should be emphasized at the end of July the number of initial claims fell to 255,000, its lowest value since 1973.

Meanwhile, it became known that the moving average for 4 weeks, which smooths the volatile weekly figures, dropped to 6500 - up to 268 to 250 (at least from mid-May)

Meanwhile, the number of people who continue to receive unemployment benefits fell by 14,000 to 2.255 million. For the week ended July 25th. The figure for the previous week was revised to 2.269 million. To 2.262 million. Recall data on re-treatment come with a week delay.

The pound depreciated significantly against the dollar, reaching its lowest level since July 24, which was associated with the outcome of the meeting of the Bank of England. As expected, the Bank of England decided to leave its key rate at around 0.5%. The Committee also voted to leave intact the program of asset purchases at GBP 375 billion. The last time the Central Bank changed the rate, he lowered it to 0.5% by March 5, 2009. Minutes of the meeting of the Bank of England, published today, showed that MPC split vote in the first time since the beginning of this year. Representatives of the committee not agreed about whether to raise rates. According to the protocol, only one member of the MPC - Ian McCafferty - endorsed the rate increase. Markets had expected the Hawks will be 2. So, for the last time, in December, for a rate hike by 25 basis points We made McCafferty and Martin Weale. Now the Central Bank to raise rates implies in the first half of 2016: 1.0% to the end of 2016 and 1.5% by the end of 2017. Also, the Central Bank predicts the return of consumer prices to the target level of 2% over the next 2 years. Today the head of the Bank of England Carney stressed that the date of the rate increase has become closer, and the subsequent tightening will be gradual.

Pressure on the euro earlier had data for Germany. According to the report the Ministry of Economy of Germany, the volume of orders in the manufacturing sector in Germany in June rose sharply by 2%, exceeding the forecast of 0.2%. This is due to orders from outside the euro zone, as well as placing large orders. Thus, orders returned to the level of April 2008. The volume of export orders compared to May increased by 4.8%, supported by the decline of the euro, to increase the competitiveness of goods from the eurozone beyond. Orders within the country as compared to the previous month decreased by 2.0%.

Another report showed that construction sector in Germany continued to show expansion in July, but the growth rate slowed down to 6-month low. The seasonally adjusted index for the construction sector PMI fell to 50.6 from 50.7 in June. However, the index remained above 50, indicating expansion. Add the expansion of activity has marked the 6th consecutive month, but the latest growth was the weakest in this sequence.

The Swiss franc fell sharply against the US currency, updating yesterday's low, which was associated with the publication of weak statistics on Switzerland. As it became known, the level of consumer sentiment in Switzerland weakened sharply in the past month as the strong franc put pressure on future economic and financial expectations. This was announced by the results of studies of the State Secretariat for Economic Affairs (SECO). According to consumer confidence index fell to -19 in July compared to -6 in April. Experts expect that figure will drop only to -7. Consumer expectations for the future economic development deteriorated significantly in July - the corresponding index was -25 points in July compared with -8 points in April. At the same time, expectations for increased unemployment - rose to 65 in July from 51 points in April. We also add that households were more negative with respect to their future financial situation - the indicator fell to -4 points in July from 5 points in April. Consumers were also less optimistic about the level of their savings in the next 12 months compared with April. The data also showed that the sensor, which shows good if now is the time to make major purchases, fell in July to six from 15 in April.

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