Market news

4 May 2016

American focus: the US dollar strengthened significantly against the Canadian dollar

The US dollar traded mixed against the euro as a whole has remained in a narrow range. Currency Fluctuations were associated with mixed US data. Initially, the pressure on the dollar has had a report on the labor market from ADP, which has lowered the likelihood that the Fed will be able to raise twice this year. As it became known, in April, the number of employees increased by 156 thousand. People in comparison with the revised figure for March at the level of 194 thousand. (Originally reported 200 thousand.). Analysts had expected the number of people employed will increase by 196 thousand. In sectoral terms of number of employees among the goods-producing companies decreased by 11 thousand., While among those who provide services, rose to 166 thousand.

Positive impact on the US currency had statistics on business activity. Final data presented Markit Economics, showed: the seasonally adjusted index of business activity in the US service sector grew in April to 52.8 points compared to 51.3 points in March. Analysts had expected the index to reach 52.1 points. The last reading was the highest since January and above the average for the 1st quarter (51.4). Also add that the index remains in expansion territory for the second month in a row. The final composite index of the PMI, which covers the production sector and the service sector, rose to 52.4 from 51.3, also reaching the highest level since January 2016.

Another report showed that the index of business activity in the US service sector, calculated by the ISM, rose in April, reaching 55.7 compared to 54.5 in March. According to the forecast, the index value would grow to 54.7. The ISM said that the expansion of activity in the service sector has recorded the 75th consecutive month.

The British pound lost ground against the previously-earned dollar, and returned to the minimum session, which was caused by the publication of strong business activity in the US data. Pressure on the pound also continued to present a report on activity in the construction sector. It became known that the index of business activity in the UK construction sector fell to 52.0 in April from 54.2 in March .. Analysts had expected a decline to 54.0. Despite the fact that the general business activity index remains above the contraction of the construction sector activity index reached almost three-year low. According to Markit economist Tim Moore, "the weakening of the growth outlook for the UK economy, along with the uncertainty in the run-up to the referendum on the exit from the EU, give rise to major customers to defer a decision on costs." He also added that the construction companies prefer to wait and see what happens, before taking any decision.

The Canadian dollar fell by almost 200 points against the US dollar, approaching the minimum of 18 April. Currency Decrease was due to the negative dynamics of the oil market, as well as the publication of disappointing data on Canada. The fall in oil prices accelerated after the US Department of Energy reported a significant increase in oil reserves than expected. As it became known, in the week crude oil inventories 23-29 April rose by 2.8 million barrels to 543.4 million barrels, a record high for this time of year. Analysts had expected an increase of 1.444 million. Barrels. Meanwhile, oil inventories in Cushing terminal rose 243,000 barrels to 66.3 million barrels. Gasoline stocks rose by 536,000 barrels to 241.8 million barrels. Analysts had expected stocks to fall 200,000 barrels. Recall yesterday's report, submitted to the American Petroleum Institute showed that US crude stocks rose 1.3 million barrels. Distillate stocks fell by 2.6 million barrels, while gasoline inventories fell by 1.2 mln. Barrels.

With regard to statistics on Canada's trade deficit unexpectedly rose in March, reaching a record 3.41 billion. Canadian dollars. Last change reflects prolonged problems faced by the economy due to low oil prices. Analysts had expected the deficit to drop to 1.4 billion. Canadian dollars. It is worth emphasizing the figure for February was revised to -2.47 billion. Canadian dollars to -1.91 billion. Canadian dollars. In addition, data showed that in March, the volume of exports fell by 4.8 percent to 40.99 billion. Canadian dollars (the lowest rate in more than two years). Meanwhile, the volume of imports decreased by 2.4 percent to 44.40 billion. Canadian dollars.

Market Focus
  • Canadian union leader says three NAFTA nations are still far away from resolving the most complex issues
  • Swiss Producer and Import Price Index fell 0.2% in March
  • OPEC Sec-Gen says oil inventories in February below 50 mln barrels above 5-year-average, decline trend to continue in coming months
  • Earnings Season in U.S.: Major Reports of the Week

All posted material is a marketing communication solely for informational purposes and reliance on this may lead to loss. Past performance is not a reliable indicator of future results. Please read our full disclaimer.

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