Search

(+357) 22314160

TeleTrade News

February 2014 19

Greenback dips after disappointing retail sales and jobless claims figures

Financial Market News - Teletrade All eyes last week were on dollar’s slide against all rival currencies, after the release of disappointing U.S. retail sales report for January and unexpected rise in initial jobless claims the week ended February 8.

Official data from the U.S. Commerce Department published on the economic calendar on Thursday, February 13th, showed a slide in retail sales for the second consecutive month in January. The report indicated that retail sales decreased by a seasonally adjusted 0.4% the previous month, upsetting expectations for a 0.3% rise and seriously questioning the outlook of the U.S. economic recovery. December’s figure was revised down to 0.1% decline from a previously reported 0.2% gain, when winter clothing sales rose. Strong retail sales associate with robust economic growth, while decreasing retail sales show a declining economy, thus directly affecting the market sentiment in a negative way.

The report also indicated that core retail sales, excluding automobile sales, were flat in January, compared to expectations for a 0.1% increase. The corresponding figure in December was revised down to a rise of 0.3% from a formerly documented upsurge of 0.7%. Core sales reflect on the consumer spending element of the U.S. Gross Domestic Product. It is noteworthy that consumer spending accounts for 70% of the overall economic growth.

The median estimate of 86 economists surveyed by Bloomberg News before the release of the official data in Thursday, showed stagnation in U.S. retail sales in January. In anticipation of the report, TeleTrade analysts said that “a probable decline or flat outcome on retail sales report, will provide little motivation for traders to buy the greenback, where this in the short-term will imply little prospective for the currency’s recovery”.

Meanwhile, official data from the U.S. Department of Labor showed that the number of individuals who filed for unemployment assistance in the week ending February 8, increased to 339,000 from the previous week’s figure of 331,000. Economists had anticipated jobless claims to drop by 1,000 to 330,000, so the announced figure came as a shock. The unexpected 8,000 weekly increase fuelled traders’ concerns over the strength of the U.S. labor market.

Euro gained ground

Following the release of the weak data on Thursday, 13, the single currency rose versus the U.S. dollar, with EUR/USD climbing up to 0.65% to 1.3681, rebounding from the previous session’s lows of 1.3561, after the statements of Benoit Coere - ECB member - that the ECB is seriously considering a negative overnight interest rate on deposits.

In Friday 14, however, the single currency peaked to an almost three-week high against the greenback, with EUR/USD gaining 0.08% to 1.3691. The euro found further support after the release of preliminary data reporting rise in Eurozone’s Gross Domestic Product by 0.4 in the last quarter. The report that was published by Eurostat, exceeded forecasts for a 0.2% increase, following a merely 0.1% rise in Q3. Eurostat’s data also indicated that the seasonally-adjusted GDP growth in the Eurozone area was projected to be 0.5% up compared to the last quarter of 2012.

Another report earlier in the day, indicated that the German GDP increased by 0.4% in Q4, above forecasts for a 0.3% increase, while the French GDP rose 0.3% during the same period, with regard to forecasts for a 0.2% rise.

GBP in 33-month high

The sterling edged up to a 33-month high versus the U.S. dollar on Friday, with GBP/USD increasing to 1.6715 during European morning session. The cable strengthened significantly after the Bank of England revised its forecast for the U.K. economy from 2.8% to 3.4% for the current year on Wednesday, 12. The BoE also updated its forward guidance on bank rates, stating it will not increase rates until the spare capacity in the U.K. economy has been fully absorbed, which it is not expected to occur until 2015.

Performance of Other Major Currencies

In the wake of the unexpectedly weak data on Thursday, the USD/JPY hit 101.71, the lowest since February 7. The greenback remained lower on the following day, with USD/JPY reaching 101.85. The yen generally found support against its rival counterparts at the end of the week, as decreases in Asian equities enhanced demand for Japan’s safe currency.

On Friday 14, the U.S. dollar also edged lower versus the Australian and New Zealand dollar, with AUD/USD rising 0.51% to 0.8924 and NZD/USD gaining 0.32% to 0.8368, after the announcement of positive inflation figures from China, as the country is the main trading partner of both Australia and New Zealand. The greenback lowered against the Swiss franc and the Canadian dollar, with USD/CHF falling 0.11% to 0.8926 and USD/CAD dropping 0.20% to 1.0953.

Among weak retail sales and employment numbers, the U.S. dollar index, which records the overall performance of the currency against a basket of six other major currencies, fell 0.18% to 80.21 on Friday, which is the lowest in more than a month.

About TeleTrade – Financial Markets Expert

Founded in 1994, TeleTrade is a truly global brand with over 200 offices in 30 countries, being an acknowledged leader in its field with numerous industry and business awards. TeleTrade-DJ International Consulting Ltd is established in Cyprus and maintains representative offices in most EU countries. It is licensed and regulated by CySec (Cyprus Securities and Exchange Commission) under licence number 158/11 and operates in accordance with MiFID (EU Investment Directive).

To maximize our visitors browsing experience TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies. If you disagree, you may change your browser settings at any time. Read more

Fb twitter linkedIn youtube
proficient forex broker teletrade
  • © 2011-2017 TeleTrade-DJ International Consulting Ltd

    TeleTrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

    The company operates in accordance with Markets in Financial Instruments Directive (MiFID).

  • The information on this website is for informational purposes only. All the services and information provided have been obtained from sources deemed to be reliable. TeleTrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

  • TeleTrade cooperates with SafeCharge Limited, which is an electronic money institution authorized and regulated by the Central Bank of Cyprus and is a principal member of MasterCard Europe and Visa Europe. We also cooperate with Moneybookers and Neteller, which offer electronic e-wallet services authorized and regulated by the Financial Conduct Authority.

    Please read our full Terms of Use.

  • To maximize our visitors browsing experience TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies. If you disagree, you may change your browser settings at any time. Read more

    TeleTrade-DJ International Consulting Ltd currently does not provide its services to residents or nationals of the USA, and also doesn't provide retail Forex and CFD accounts to residents or nationals of Belgium.

Connect with Us
Share on
social networks
Online
consultant
Request a callback
Top Page