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23.03.2016 18:20

American focus: the US dollar strengthened considerably against the pound

The US dollar rose modestly against the euro, updating yesterday's high, helped by comments Fed officials about a possible rate hike next month. Today the head of the St. Louis Fed Bullard said that there may be arguments in favor of a rate hike in April. "Question rate hike at the April meeting is not removed from the agenda at the same time is unreasonable to raise rates if inflation expectations will subside." - He added. Recall, Scatter the Fed indicates that the end of the year maybe two rate hikes. However, Bullard said that the regulator does not enter into commitments in this regard, and should respond to the economic data from meeting to meeting. Earlier the president of the Federal Reserve Bank of Philadelphia, Patrick Harker noted that there is good reason to continue raising rates, and added that he would like to see three raises before the end of the year. Meanwhile, Chicago Fed President Charles Evans said that he expects two per cent increase on loans until the end of the year if the economy will maintain a given rate. Also recall that yesterday the Federal Reserve Bank of Atlanta President Dennis Lockhart signaled that the Fed may raise interest rates in April.

In addition, a positive impact on the dollar have data on the housing market. The Commerce Department reported that sales of new buildings were restored in February, became another sign of continuing, albeit restrained, the momentum in the housing market. Sales of new buildings reached a seasonally adjusted annual rate of 512 000. This was the highest since December and was slightly above economists' forecast of 510 000. The February figure was 2% higher than in January, but 6.1% lower than a year ago. But the rate in February 2015 was unusual; 501,000 new homes sold during the year have been reported. January data, which originally reported (494,000) have been revised to 502 000. The median sale price was $ 301,400, which is 6.2% higher compared to January.

The pound continued to fall in price against the US currency came close to a week low. Since the beginning of the week the pound has lost more than 350 points against the dollar, which is mainly due to increasing concerns about the exit of Britain from the EU and the speculation about another rate hike by the Federal Reserve next month. Today, Rabobank analysts said, "if in a referendum on June 23 the majority of British citizens will vote for the exit from the EU, the GBP / USD pair may fall to $ 1.20, but if Britain decides to stay GBP / USD pair will reach $ 1.53 in 12 months." The uncertainty of trade relations between Britain and the EU in the case of the country's exit from the unit may put pressure on investment flows and lower demand for the pound, "- said the Rabobank.

A slight effect on the pound have experts study the results of the Central Bank of England on business conditions. The report noted that the annual rate of growth of activity in the UK slowed in the first quarter of 2016. As the cause of the last speakers, experts have identified a slowdown in global growth and the strengthening of economic uncertainty. Growth in consumer spending was reported to have remained stable, with little change in retail sales compared with the previous quarter. Meanwhile, activity in the services sector slowed down slightly, mainly due to falling rates in the field of tourism. Retail prices continued to fall against the backdrop of steady fall in the value of food. Analysts said that the increase in labor costs was moderate, and the company reported a decline in hiring needs. The company also noted that the volume of exports declined in comparison with the 1st quarter last year.

The Canadian dollar dropped more than 150 pips against the US dollar, which was mainly due to the resumption of the fall in oil prices after the publication in the US petroleum inventories report. US Department of Energy reported that crude oil inventories rose week of March 12-18 by 9.4 million barrels to 532.5 million barrels, a new record high for this time of year. Analysts had expected an increase to 3.5 mln. Barrels. Oil reserves in Cushing terminal fell by 1.3 million barrels to 66.2 million barrels. Gasoline inventories fell by 4.6 million barrels to 245.1 million barrels. Analysts had expected inventories to fall by 2 million barrels. The utilization of refining capacity fell by 0.6% to 88.4%. Analysts have suggested that the rate will fall to 0.1%. Meanwhile, oil production in the US in the week of March 12-18, dropped to 9.038 million. Barrels per day versus 9.068 million. Barrels per day from the previous week. Experts note that the decline in production rates are high enough, and if this trend continues over the next 1-2 weeks figure could fall below 9 million. Barrels per day.

Market Focus

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