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11.02.2016 19:21

American focus: The US dollar fell against the euro

The Swiss franc strengthened slightly against the dollar, retreating from session low. In the course of trading influenced by the general weakening of the US currency, growth in demand for safe-haven assets, as well as the comments the head of SNB Thomas Jordan. During the interview, Jordan said that the Swiss franc is still "overvalued" and added that he does not rule out further rate cuts. "We've come a long way on the issue of negative interest rates. At the moment, we are closely monitoring the situation and do not exclude any scenario. In order to weaken the franc, we used the negative rate and are ready to intervene in the currency market. Franc remains overvalued, but should eventually . loosen revalued now become a less important factor than a year ago ", - said the head of the Central Bank, adding that the turbulence in Europe could once again draw attention to the franc as a safe-haven, but it makes no sense to establish a new threshold level of the Swiss franc. In addition, Jordan commented on the situation with the prices. "Inflation is currently at negative values ​​in the area and at levels lower than we would like, but our expansionary monetary policy is aimed at the return of inflation in the zone of growth in the medium term." - Jordan said.

Data previously presented today showed that consumer prices in Switzerland fell in a stable pace in January. The consumer price index fell by 1.3 per cent per annum in January, saying the same rate of decline as in December. This figure was also in line with the consensus forecast. Prices are falling in November, 2014. On a monthly basis, consumer prices also decreased in a stable pace of 0.4 percent in January, as expected by economists. The decrease was mainly due to sales in the clothing sector, as well as oil prices fall.

The Japanese yen fell sharply against the dollar, but then was able to regain some lost ground. The main reason for fell of the yen were unconfirmed rumors of intervention by the Bank of Japan. Once again, investors' attention has shifted the mood of the markets. Experts note that the concerns about the global economic outlook triggered the fall in stock markets, while increasing the demand for safe-haven assets, namely the yen and the euro.

In focus were also data on the US labor market. The Labor Department reported that the number of Americans who first applied for unemployment benefits fell last week, became another sign of the US labor market stability in times of economic crisis abroad. Primary treatment at 16,000 down for unemployment insurance and seasonally adjusted reached 269,000 for the week ending 6 February. Economists had expected 281,000 initial claims last week. Data for the previous week remained unchanged at 285 000. The report also showed that the number of repeated applications for unemployment benefits fell by 21,000 to 2.239 million in the week ended January 30th. Continuing claims are reported with a one-week lag. Some economists worry that low levels of initial claims signals the lack of dynamism in the labor market, or it may reflect the state of the population, which is long-term unemployed, and has no right to submit new applications for unemployment benefits.

The euro rose against the US dollar, reaching a maximum of 21 October 2015, which was mainly due to an increase in demand for safe-haven assets in the face of increasing risk aversion. In the course of trading was also influenced by the situation in the bond market: the yield of British bonds fell to a record low, and the yield on German bonds reached their lowest level since April 2015. Negatively on the dollar also reflected the comments by the US Federal Reserve Chairman Janet Yellen on the introduction of negative interest rates. She also reiterated there are several threats to the country's economy from the volatility of world markets and the weakness of the international economy. Yellen said that the Central Bank is now trying to assess how much the market situation may impact on the economy, but so far to make any conclusions premature. In addition, she did not rule out further rate hikes in the coming months. According to a recent survey of Wall Street Journal, the Fed will not povyshatstavki during meetings in March and April, but is more likely to produce a policy tightening in June. Only 9% of respondents expect an increase in key interest rates at the meeting on March 15-16, the Central Bank, although this opinion was held by 66% of respondents in the last month. Approximately 60% of economists forecast a rate hike at the meeting of 14-15 June, which is 25% more than in the January survey. Approximately 13% of economists expect the Fed to raise rates at the meeting on April 26-27, which is 7% more than in the previous survey. On average, the economists estimated the probability of a Fed rate as follows: 19% in March and 22% in April and 49% in June.

11.02.2016 17:19

WSE: Session Results

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