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The dollar rose modestly against the euro, returning to the level of opening of the session. Support currency was positive US data. The US Commerce Department reported that orders for durable goods rose in April on strong demand for transportation equipment and a range of other products, but the continuing weakness of the planned business spending suggests that the decline in production is far from complete. According to the data, orders for durable goods jumped 3.4 percent after a revised upward growth of 1.9 percent in March. Earlier it was reported that orders for durable goods rose 1.3 percent in March. Non-defense capital goods orders excluding aircraft, which are closely monitored by the sensor of the planned business spending, fell 0.8 percent after an upwardly revised decline of 0.1 percent in the previous month. Earlier it was reported that they fell by 0.8 percent in March. Economists forecast that orders for durable goods rise by 0.5 percent last month and core capital goods orders to rise by 0.4 per cent.
Meanwhile, the Labor Department report showed that the number of Americans applying for unemployment benefits fell last week, suggesting that employers continue to expand moderately and the labor market in the world's largest economy remains strong. Primary applications for unemployment benefits, a measure of layoffs throughout the US, fell by 10 000 and amounted to a seasonally adjusted 268,000 for the week ended May 21. This was below economists' forecast of 275 000. Last week, the 64th week was marked by a row when treatment remained below 300,000, the longest such streak since 1973. The four-week moving average, which smooths out weekly fluctuations, rose by 2,750 to 278.500. The report showed that repeated applications for unemployment benefits rose by 10,000 to 2.16 million in the week ended May 14.
On the trading dynamics also affect expectations of Fed Chairman Yellen speech, scheduled for Friday, which may to some extent clarify the prospects of tighter monetary policy of the Central Bank. Currently, futures on interest rates Fed indicate that the probability of a rate hike in June is 30% against 4% last Monday. Meanwhile, the chances increase rate estimated at 57% in July.
The pound dropped significantly against the dollar, having lost almost all of yesterday earned position. The reason for such dynamics were comments by the Fed Powell, signaling the possibility of a rate hike in the near future. Recall, higher interest rates are favorable for the US dollar as make it more attractive to investors. Powell noted that the increase in interest rates may be appropriate "fairly soon." However, he added that the pace of rate increases should be gradual. "Global risks and increased market sensitivity to changes in policy speak in favor of a gradual increase in interest rates", - said the politician. - Reduce global risks pleases, but underlying risks on the part of the UK from the EU exit threats and challenges in China saved the US economy is on the right track, "He also said that the situation in the labor market continues to improve, there are tentative signs of increasing wages.." allowing the Fed to fulfill its dual mandate. I expect that the economy will continue to show growth by approximately 2%. Meanwhile, inflation should return to 2% when the price of oil and the US dollar, on the whole, will remain stable ", - Powell said experts note, despite speculation that the Fed may raise interest rates in June, investors will scrutinize tomorrow. comments Fed chief Janet Yellen.
The Canadian dollar fell considerably against the US dollar, almost entirely offset by the growth, said earlier today. The pressure on the currency has resumed its decline in oil prices against the background of US dollar rate growth. In recent weeks, crude oil rose in price against the background of supply disruptions, mainly due to the decrease in supply of raw materials from Canada due to raging forest fires and Nigeria because of the unrest. Reduction of oil reserves in the US also increased the hopes of beginning to restore the balance in the market. However, analysts note that many of the supply disruptions are temporary. Higher prices could also hinder the recovery in the long term, as they encourage US producers to increase production. Important market participants also switched to the meeting of representatives of the OPEC countries, which is scheduled for June 2nd. Discussion will focus on the possibilities of raising prices and stabilize the market.