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10.06.2014 15:50

Foreign exchange market. American session: the euro slid to 4-month lows against the U.S. dollar

The U.S. dollar traded mixed against the most major currencies. The U.S. dollar was still supported by Friday’s nonfarm payrolls report. The U.S. economy added 217,000 in May, missing expectations for a 218,000 rise, after a 282,000 gain in April. April’s figure was revised down from a 288,000 increase.

The U.S. Labor Department released the Job Openings and Labor Turnover Survey or JOLTS today. Job openings in the U.S. climbed by 289,000 to 4.46 million in April. That was the highest figure since September 2007. Analysts had expected an increase to 4.04 million. The pace of firing also rose.

The euro slid to 4-month lows against the U.S. dollar despite the strong industrial production in France. Industrial production in France rose 0.3% in April, meeting expectations, after a 0.4% decline in March. March’s figure was revised up from a 0.7% decrease.

On a yearly basis, industrial production in France was flat in April, after a 0.8% fall in March.

The euro suffers due to bond yield gap between some euro area government bonds and U.S. Treasuries. While the currency in the Eurozone is to remain permanently cheap, the first interest rate hike by the Fed in the United States and by the Bank of England in the U.K. is more likely.

The European Central Bank cut its interest rate to 0.15% from 0.25% last Thursday. The ECB also cut its marginal lending to 0.40% from 0.75% and reduced its deposit rate to -0.10% from 0.0%. The European Central Bank is the world’s first major central bank to use a negative rate. The deposit rate of -0.10% means that commercial bank will be charged for holding their reserves. This measure should spur commercial banks to ramp up lending.

The British pound traded lower against the U.S. dollar. Manufacturing output in the U.K. increased 0.4% in April, meeting expectations, after 0.5% gain in March. On a yearly basis, manufacturing production in the U.K. rose 4.4% in April, exceeding expectations for a 4% increase, after a 3.3% increase in March.

Industrial production in the U.K. climbed 0.4% in April, in line with forecasts, after a 0.1% decline in March. On a year-over-year basis, industrial production in the U.K. rose 3.0% in April, after a 2.3% increase in March. That was the biggest annual increase since 2011. Economists had expected a 2.7% gain.

The National Institute of Economic and Social Research (NIESR) released their monthly U.K. GDP estimates. They forecasted that GDP increased by 0.9% in the three months ending in May after rise of 1.1% in the three months ending in April 2014.

The Swiss franc declined against the U.S. dollar. Switzerland’s unemployment rate remained unchanged at 3.2% in May, as expected.

Retail sales in Switzerland increased 0.4% in April, missing expectations for a 3.5% gain, after a 3.4% rise in March. March’s figure was revised up from a 3.0% increase.

The New Zealand dollar traded higher against the U.S dollar in the absence of any major economic reports. The kiwi was supported by expectations the Reserve Bank of New Zealand will raise interest rates again this Wednesday.

The increasing consumer price inflation in China supported the New Zealand and Australian dollar. The Chinese consumer price index increased 2.5% in May, after a 1.8% gain in April. Analysts had expected a 2.4% rise.

The Chinese producer price index declined 1.4% in May, after a 2.0% decrease in April. Analysts had expected a 1.5% fall.

The Australian dollar traded higher against the U.S. dollar due to the better-than-expected Australian business confidence data and the Chinese consumer price inflation. The National Australia Bank released its business confidence index for Australia. The index climbed to 7 in May, from 6 in April.

Job advertisements in Australia fell 5.6% in May, after a 1.9% increase in April. April’s figure was revised down from a 2.2% gain.

Home loans in Australia were flat in April, after a 0.8% fall in March. March’s figure was revised up from a 0.9% decline. Analysts had expected a 0.3% gain.

The Japanese yen traded higher against the U.S. dollar ahead of the Bank of Japan (BoJ) meeting this Friday. Investors speculate that the BoJ’s monetary policy will support the Japanese currency.

Japan’s preliminary machine tool orders decreased to 24.1% in May from 48.7% in April. April’s figure was revised down from 48.8%.

Japanese tertiary industry activity index dropped to -5.4% in April from 2.4% in March. Analysts had expected the index to fall -3.3%.

10.06.2014 15:40

Oil rose

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