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Overview of the main economical events of the current day - 18/10/2013

The Agreement Is Reached but the Dollar Slumped

The US dollar slumped on Thursday having shown the lowest daily drop for a month after the American lawmakers approved a bill on Wednesday evening which recovered government work and increased national debt limit. Unemployment Claims also turned out worse than expected. The pound growth was supported by retail sales data which exceeded the forecast. Business Confidence rose in Australia and Consumer one – in New Zealand.

The US technical default was managed to be prevented but the attention of the markets is shifted towards the damage made by the shutdown and also towards the fact that the Fed will have to put off the start of QE3 tapering off for a later period. Government shutdown caused a serious damage to economy, said President Obama.

FOMC member Evans said on Thursday that the Federal Reserve would probably keep stimulating for some time considering the lack of macroeconomic data for the estimate of economic state. FOMC member Fisher said that the Fed was not likely to taper QE3 at the nearest meeting on October 29-30.

The leaders of BlackRock and PIMCO investment funds believe that the Federal Reserve could put off asset purchase reduction till June, 2014 to support the economy after the political crisis. The expenditure for the US government recovery may turn out higher than the losses caused by a temporary shutdown - say the analysts polled by Bloomberg.

According to the Standard and Poor's, temporary government shutdown will lead to the US GDP decrease in the 4th quarter of this year by 0.6% and will cause serious negative consequences on consumer confidence. Bloomberg Consumer Sentiment fell to its low last week for almost two years. Americans became more pessimistic in estimating economic outlook amid aroused concerns that the political opposition could do harm to the economy.

China's credit rating agency Dagong has downgraded the U.S. rating from A to A- with a negative forecast. Although this step is rather symbolic – they say that the Fitch is going to follow Dagong soon. At the same time Moody's agency announced that the decrease of the US credit rating in the nearest 2 years was unlikely.

Meanwhile, Philadelphia Fed Manufacturing Index turned out slightly better than forecasted (15 p.) and dropped in October to 19.8 p. in comparison with 22.3 p. in September. At the same time the US Unemployment Claims fell less than expected last week – by 15 thousand to 358 thousand against the expected decrease to 335 thousand.

The euro reached 8.5-month high Vs the dollar and the pound – almost 2-week. The UK retail sales rose in September by 0.6% against the expected growth by 0.4%. At an annual rate retail sales rose by 2.2% last month in comparison with the growth by 2.1% in August and the forecast of +2.0%. Retail sales growth for the third quarter accounted for 1.5% q/q – it is the highest quarterly growth from the first quarter of 2008.

Retail Sales Change in the UK and the USA (m/m)

Retail Sales Change in the UK and the USA (m/m)

Australian and New Zealand dollar continued growing and updated the heights of October on Thursday. NAB Quarterly Business Confidence rose to +3 in the third quarter compared with -1 in the second quarter – and reached the highest level for two years. ANZ Consumer Confidence Index rose by 2.9% in October to 122.3 p. in comparison with 118.8 p. in September. According to the Westpac report for the nearest 10 years on New Zealand economy, a stable growth will continue till 2015 and will start slowing down only in the second part of the decade.

By MasterForex Company

 

[gopi_ahs@yahoo.com]

Hi Andrew,

Though you analysis really work but I gage been facing one issue with the forecast.
I reside in India (Part of Asia) and every day I receive your email on the strength and weaknesses of currency for the next 24hrs but the issue is the weakness or the.strength I receive is of previous day.
For example today that is 18th Oct you say to buy EUR/USD and sell USD/CHF but this has already taken place on 17th Oct, so please help in this regards.

Thanks
Gopi

 

[MasterForex Broker]

Overview of the main economical events of the current day - 21/10/2013

The Main Events of the Week

The US dollar almost didn’t change at the end of trade on Friday after a sharp decline on Thursday and amid lack of any significant macrostatistics. Canadian dollar had almost no reaction towards consumer price index data which in general coincided with the forecast. Australian dollar continued growing on the back of Chinese positive GDP and industrial output data. Chinese economic growth at an annual rate accelerated in the 3d quarter, which was recorded for the first time in three quarters.

Be the end of the week the dollar had lost 1.04% according to the dollar index amid the growth of expectations that the Fed would continue stimulus measures for a longer period of time after approving a temporary budget agreement in the USA. The highest growth Vs the dollar was shown by New Zealand dollar (+2.23%), Australian dollar (+2.20%) and British pound (+1.34%). After them go Swiss franc (+1.07%), euro (+1.06%), Japanese yen (+0.81%) and Canadian dollar (+0.62%).

On Wednesday the Congress and the White House came to an agreement which allowed to avoid the US debt default and recover government work after 16 days of shutdown. However, the problem is not solved and the crisis is just put off for three months. The agreement is valid only till January 15 and it means that the budget stalemate can happen in January again –when the debates about the budget and national debt limit increase return. Budget uncertainty will influence Fed decisions and it is unlikely to start QE tapering at October or even December meeting.

This week will be saturated. The US federal institutions started working from Thursday and this week some missed statistics data which haven’t been released for almost three weeks will be published. On Tuesday October, 22 there will be a release of Non-Farm Payrolls, on Wednesday – imports prices and on Thursday - JOLTS Job Openings. Missing Crude Oil Inventories for a week till October 11 will be published on Monday and Natural Gas Storage – on Tuesday.

Inflation data will be published in a week: PPI – on Tuesday, October 29, and CPI – on Wednesday, 30. Labour market report for October is likely to be released a week later – on November 8. The rest statistics data released on November also may be delayed.

Among the USA plan data - on Monday there will be a release of Existing Home Sales (a drop by 3.3% is expected – the lowest monthly decrease since June, 2012) and on Thursday - New Home Sales. On Tuesday - Richmond Manufacturing Index, on Wednesday - FHFA House Price Index, on Thursday - Flash Markit Manufacturing PMI and on Friday – Durable Goods Orders and Revised U. of Michigan Consumer Sentiment.

The main event in the euro-zone will be preliminary manufacturing and service PMI of France, Germany and the whole euro-zone which is released on Thursday; and also IFO Business Climate report on Friday. There is an expectation of index growth which will show euro-zone improving economic state. On Wednesday Flash Euro-Zone Consumer Confidence will be released, and on Friday – retail sales in Italy.

The main event in the UK will be a publication of preliminary GDP for the third quarter on Friday. It is expected that the economic growth rates have gathered pace in the third quarter to 0.8% q/q compared with 0.7% in the second quarter. On Tuesday state finance data will be released, on Wednesday – the Bank of England Meeting Minutes and BBA Mortgage Approvals; on Thursday - CBI Industrial Order Expectations; and on Friday - Index of Services.

Trade balance of Japan will be released on Monday and Consumer Price Index – on Friday. In Australia inflation report for the third quarter and CB Leading Index will be released on Wednesday. In New Zealand trade balance will be released on Wednesday. On Wednesday there will be announced a decision of the Bank of Canada on interest rate, there will be a release of BOC Monetary Policy Report and BOC Press Conference will be held. On Tuesday retail sales in Canada will be released. On Thursday there will be a release of HSBC Flash Manufacturing PMI.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 22/10/2013

Dollar Stopped Falling Before Non-Farm Payrolls

The US dollar almost didn’t change at the end of trades on Monday according to the dollar index before the publication of important labour market data for September on Tuesday which can turn out good as it will reflect the period before the government shutdown. The dollar lost almost all its slight growth after the release of housing market data which turned out a little worse than forecasted. The yen fell amid weak trade balance data of Japan.

Non-Farm Payrolls which must have been released on October 4 will be published this Tuesday. The U.S. employment rate is expected to have risen by 180 thousand in September against 169 thousand prior month – and unemployment rate remained unchanged at 7.3%. Employment and unemployment growth rate is paid special attention as the Federal Reserve announced unemployment rate one of the Forward Guidance for monetary policy.

The US Existing Home Sales data for September are slightly worse than expected. According to the NAR – home sales decreased to 5.29 million at an annual rate against the forecasted decline to 5.30 million. However, prior month data were considerably revised for the worse – from 5.48 million to 5.39 million. Home sales dropped after reaching its height for four years.

FOMC member Charles Evans made speech on Monday supporting the continuation of monetary stimulation and repeated that the central bank would need at least a few months more to watch labour market data before taking decision on QE tapering. Evans said that a number of good labour market reports are required as well as confirmation of economic growth strengthening and a few months to estimate the trend. He marked that the Fed wouldn’t be able to make the decision on QE tapering in December confidently – amid the expectations of reviving debates on the US budget issues in January-February.

According to the economists polled by Bloomberg the decision on QE tapering from $85 billion to $70 billion will be made at Fed meeting only on March 18-19, 2014. By July, 2014 the Fed will have decreased asset purchases to $25 billion a month and will finish it in October. Besides, fiscal crisis in the USA will lead to economic growth rate decline in the current quarter by 0.3%.

Finance Minister Jacob Lew urged the members of the Congress to do everything possible to avoid another government shutdown and “almost default” situation. Meanwhile, according to The Wall Street Journal, frightening prospects of further reductions in the U.S. defense spending in the current fiscal year that began October 1, could push the Republicans and Democrats to a more rapid and efficient budget deal. However, the negotiations will be complicated due to political struggle before the elections to the Congress 2014.

The yen dropped on Monday against all major currencies after the release of trade balance which deficit decreased less than expected. Trade deficit fell to 932.1 billion yen in September from 962.8 billion in August – while a decrease to 918.6 billion was expected. Exports growth slowed down in September to 11.5% at an annual rate from 14.6% prior month, the imports grew from 16% to 16.5%. It is the 15th month in a row when the trade balance runs with deficit and it is the longest period of deficit since 1979. Extra pressure on the yen was put by the speech of the Bank of Japan governor Haruhiko Kuroda who promised to continue a soft monetary policy to reach a stable inflation. The Bank of Japan raised economic estimate of all nine regions of the country on Monday.

Germany Finance Ministry said on Monday that the country's economy will continue to grow in the second half of the year thanks to a strong industry, a large amount of investment and private consumption. Optimistic outlook marks a good momentum of Europe's largest economy, which grew by 0.7 % in the second quarter of this year. Last week the leading economic research institutes of the country reported that GDP growth this year will be 0.4 %, and next year it will increase to 1.8%. German government will publish a revised economic growth forecast on October 23.

According to analysts polled by Bloomberg, the chances of the euro to become an alternative to the dollar strengthened as the US budget crisis will probably occur every several months. On this background the situation in the euro-zone seems calm despite the problems of certain countries. This year the euro performs better among currencies of 10 developed countries. From the beginning of the year the euro rose by 5.8% to a basket of currencies of other nine developed countries, showing the best dynamics in the group while the dollar gained 1.5%. Before that the euro had been falling every year for four years: from 2009 to 2012 it dropped by 20%.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 23/10/2013

Dollar Slumped after Weak Non-Farm Payrolls

The US dollar slumped on Tuesday Vs all major currencies after Non-Farm Payrolls for September turned out much worse than forecasted despite the fact that unemployment rate dropped. According to the statistics the US economic growth is not steady enough. Weak labour market data will not allow the Fed to start QE tapering at the nearest meetings.

According to the Labour Department Non-Farm Payrolls grew in September only by 148 thousand while growth by 180 thousand was forecasted. Unemployment rate decreased to 7.2% while the reading was forecasted to stay unchanged at 7.3% since August. Despite the revision of August Non-Farm Payrolls upwards – from 169 thousand to 193 thousand – general revision for two months amounted only to +9 thousand of new jobs. Average Hourly Earnings last month also grew less than expected – by 0.1% - while its growth by 0.2% was forecasted.

The US Unemployment Rate in September turned out lower than forecasted but Non-Farm Payrolls grew less than expected. The released data continued the trend of three recent months when unemployment rate is falling but Non-Farm Payrolls turn out lower than forecasted. Unemployment rate decrease is the result of a stronger growth of Non-Farm Payrolls in the first half of the year and also reflects work force retirement.

In the nearest months employment rate decrease can be expected due to a negative influence of government shutdown and worsening market conditions already marked in September, which will be in favor of keeping the US economic stimulus program. The Reuters spread the results of the poll of Primary Dealers; and 9 of 15 expect the start of QE tapering in March, 2014. JPMorgan and Goldman Sachs also moved the terms of QE3 tapering to the next spring. HSBC analysts estimate the chances of QE3 reduction in December at 50%.

The euro updated its annual height Vs the dollar on Tuesday and reached the highest level for almost two years. Swiss franc rose to 19-month height to the dollar, and the pound – to almost 3-week. The UK budget deficit reduction in September exceeded expectations due to tax revenues growth. Public Sector Net Borrowing ex Interventions – budget deficit indicator – amounted to 11.1 billion pounds sterling compared with 12.1 billion pounds for the same period last year. Economic data prove the UK economic recovery. Swiss Trade Surplus exceeded the forecast in September and amounted to 2.5 billion Swiss franc compared with the expected surplus of 2 billion Swiss franc.

Canadian dollar rose on Tuesday to 4-week high Vs the US dollar before the Bank of Canada decision on rate on Wednesday having almost no reaction to retail sales data. Retail sales grew by 0.2% in August Vs prior month while a growth by 0.3% was expected. Prior month data were also revised downwards. At the same time Retail Sales ex Autos grew by 0.4% having exceeded forecasted growth by 0.2%.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 24/10/2013

On Wednesday China Was in the Spotlight

The US dollar rose on Wednesday to the pound and commodity currencies and almost didn’t change to the euro and weakened Vs the yen and Swiss franc. Risk inclination fell on Wednesday amid the reports about interest rates sharp increase in China and rising bad loans write-offs by Chinese banks – which aroused the growth of yen and franc and the decrease of risk-sensitive AUD and NZD. Canadian dollar dropped after a mild BOC Rate Statement in which it refused its inclination to raising interest rate.

On Wednesday compared with the prior day China was in the spotlight. Rates growth at the local interbank market turned out the highest since July and it was recorded as the People's Bank of China didn’t start injecting funds into the market on Wednesday. Seven day Repo Rate in China which indicates the availability of funds in the bank system rocketed by 42 basis points – to 4%. The central bank of China is concerned about too fast growth of real estate prices in the country. Chinese banks also have problems. Five largest banks of China increased loan write-offs by 2.9 times in the first half of 2013 to 22.1 billion yuan ($3.65 billion) in comparison with 7.65 billion yuan last year.

Worsened liquidity situation which is the main growth driver of risk assets led to risk inclination decrease, stock markets fall and the growth of yen, franc and dollar. Japanese Nikkei fell by 2% and finished the session with a significant fall since October 2. The yen rose to its high for two weeks. New Zealand dollar dropped at the fastest rate for two months, Australian currency also weakened. Though at first AUD rose on Wednesday amid the news about higher than expected inflation rate in the third quarter. Consumer Price Index rose by 1.2% Vs prior quarter while a growth only by 0.8% was expected.

Canadian dollar fell to almost 2-week low Vs the dollar after BOC Rate Statement in which it refused an inclination to interest rate increase and lowered its forecast on GDP growth for the nearest several months. The Bank of Canada left its interest rate unchanged but marked economic slowdown. Bank of Canada governor Poloz said that more negative data would make them think again about the probability of rate decrease.

The euro almost hadn’t changed by the end of the day. Germany's economics ministry raised its economic growth projection for 2014 to 1.7% from 1.6% referring to a high employment rate, strong home economy and investment growth. Euro-Zone Flash Consumer Confidence grew from -14.9 in September to -14.5 in October. The index has been at the highest level since July, 2011 for two months in a row. According to the monthly statement of the Bank of Spain economic growth has been recorded for the first time since 2-year recession. In the third quarter of 2013 Spanish GDP grew by 0.1% compared with the second quarter when its fall by 0.1% was recorded.

The Bank of England Meeting Minutes published on Wednesday showed that the central bank could start raising interest rates earlier than expected – after Monetary Policy Committee had admitted that unemployment rate in the UK would fall in the second half of the year faster than assumed. The economy will also grow in the second half of the year faster than expected. The data indicate a stable economic recovery of the UK. After the publication of meeting minutes the expectations that the UK central bank could raise interest rates much earlier than in 2016, strengthened.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 25/10/2013

EURUSD Above 1.38 for the First Time for Almost Two Years

The US dollar was traded on Thursday slightly downwards against the euro and the pound; it almost didn’t change Vs the yen, Swiss franc and Australian dollar; and it rose against Canadian and New Zealand dollars. Unemployment claims and Manufacturing PMI in the USA turned out worse than expected. The euro and the pound rose despite the decrease of euro-zone PMI and Factory orders in the UK. Australian dollar was supported by Chinese Manufacturing PMI growth.

Unemployment claims in the US fell less than expected last week – by 12 thousand to 350 thousand against the expected decrease to 340 thousand. The indicator has been falling short of market expectations for three weeks in a row. An average number of claims for past four weeks rose to 348.25 thousand from 337.5 thousand. The U.S. Flash Markit Manufacturing PMI dropped more considerably in October than expected – from 52.8 p. in September to 51.1 p. against the expected decrease to 52.5 p. PMI growth rate in October turned out the weakest for the past year.

At the same time Trade balance and job openings in the USA turned out slightly better than forecasted. The US Trade deficit in August grew by 0.4% to $38.8 billion from $38.6 billion in July, which turned out a little better than expected deficit growth to $39.4 billion. The exports fell by 0.1% while imports remained almost unchanged. The US Job Openings rose considerably in August by 1.8% to 3.88 million in comparison with 3.81 million in July.

The euro again updated its annual height having hit 1.38 Vs dollar for the first time since November, 2011 despite some decrease of Purchasing Manager Indexes which are worse than expected – except German Manufacturing PMI. Euro-Zone Composite PMI fell to 51.5 p. in October from 2-year highest reading 52.2 p. prior month while index growth to 52.4 p. was expected. However, the index has been above 50 for four months in a row already, which indicates economic growth.

Spanish Unemployment Rate fell lower 26% for the first time in a year. Unemployment rate fell to 25.98% in the third quarter of this year from 26.26% in the second quarter. Unemployment decrease to 26.10% was forecasted. ECB's Yves Mersch said on Thursday that another 3-year LTRO might not be necessary as the ECB soft monetary policy shows its effectiveness.

British pound recovered its losses at the end of the day which was after the release of weak CBI Industrial Order Expectations. CBI Industrial Order Expectations dropped to -4 in October against +9 in September. At the same time companies’ optimism increased reflecting economic recovery acceleration from the beginning of this year. Bank of England governor Mark Carney said on Thursday that the central bank would facilitate the provision of liquidity to banks if the financial system seemed unstable.

Australian dollar was supported by Chinese manufacturing PMI growth data. HSBC Flash Manufacturing PMI rose to 50.9 p. in October, the highest reading for past seven months against 50.2 p. in September – which says about the acceleration in manufacturing sector of the world’s second largest economy. The index is above important level of 50 p. for three months in a row. New Zealand dollar was traded downwards despite a significant trade deficit decrease. Canadian dollar also continued falling under the pressure of BoC Rate Statement published on Wednesday that the central bank refused its inclination to raise interest rate.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 28/10/2013

The Main Events of This Week

The US dollar almost didn’t change by the end of Friday’s trade Vs the euro, pound and yen – and continued growing to commodity currencies. The US statistics released on Friday mostly turned out worse than expected. US consumer confidence dropped in October to 10-month low amid budget debates and government shutdown. Revised U. of Michigan Consumer Sentiment fell to 73.2 p. in October against the preliminary October reading of 75.2 p. and the final September reading of 77.5 p.

Durable Goods Orders in September exceeded expectations and grew by 3.7% while 2.3% was forecasted – but the growth exceeded mainly due to aircraft orders growth (+57.5%). Such orders are volatile and as a rule don’t reflect the demand in the US economy. The key demand indicator - Core Durable Goods Orders Ex Transportation – fell by 0.1% while a growth by 0.5% was forecasted; they have been falling for three months in a row.

The euro slowed down its growth on Friday amid Business Climate decrease in Germany in October from 1.5-year high – which happened for the first time in 5 months. German Ifo Business Climate fell to 107.4 p. in October while a growth to 108 p. was forecasted. The pound had almost no reaction to preliminary GDP for the third quarter which met the expectations. The UK GDP grew by 0.8% in the third quarter in comparison with the second quarter, and by 1.5% at an annual rate. Quarterly economic growth rate in the third quarter turned out the highest since the second quarter, 2010.

By the end of the week the dollar had lost a little more than 0.5% according to the dollar index having been under pressure after the U.S. labour market weak report. The US dollar dropped Vs the Swiss franc (-1.06%), euro (-0.91%) and Japanese yen (-0.37%); it almost didn’t change to the British pound – and rose Vs New Zealand dollar (+2.55%), Canadian dollar (+1.62%) and Australian dollar (+0.95%).

One of the most important events of the week may be FOMC meeting on October 29-30; its results will be announced on Wednesday. It is supposed that asset purchase as QE will be left unchanged – which was also favored by a weaker labour market report for September. October ADP Non-Farm Employment Change report will be released on Wednesday.

A lot of US important data will be published including delayed ones because of government shutdown. On Monday there will be a release of Industrial Output and Pending Home Sales data; on Tuesday - Producer Price Index, Retail Sales, S&P/Case-Shiller HPI and CB Consumer Confidence; on Wednesday - Consumer Price Index; on Thursday - Chicago PMI; and on Friday – ISM Manufacturing PMI. Non-Farm Payrolls will be released on November 8.

In the euro-zone Euro commission business confidence will be released on Wednesday; and on Thursday – unemployment rate and preliminary inflation data. Spanish preliminary GDP for the third quarter will be released on Wednesday. In Germany – labour market and inflation reports; and on Thursday - GfK German Consumer Climate and Retail Sales. European countries will shift to Daylight Saving Time on Sunday, October 27.

In the UK CBI Realized Sales report will be released on Monday; on Tuesday - BoE Monetary & Financial Statistics; on Thursday - GfK Consumer Confidence and Nationwide HPI; and on Friday - Manufacturing PMI. In Japan retail sales data and Household Spending will be published on Tuesday; on Wednesday – preliminary industrial output; and on Thursday - BoJ Interest Rate Decision, no changes are expected.

In Australia Building Approvals, Private Sector Credit, quarterly Import Prices report will be released on Thursday; and on Friday – quarterly report on Producer Price Index. RBA governor Glenn Stevens will make a speech at a conference in Sydney on Tuesday. On Thursday RBNZ Interest Rate Decision will be announced and also Building Consents and ANZ Business Confidence will be released. In China official Manufacturing PMI will be released on Friday. In Canada GDP will be published on Thursday.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 29/10/2013

Dollar Grew Before the Start of 2-Day FOMC Meeting

The US dollar was traded upwards on Monday before 2-day FOMC meeting which starts on Tuesday amid inconsistent statistics. The US industrial output growth exceeded expectations – at the same time pending home sales dropped at the fastest rates for more than two years. The pound fell after a weak CBI Distributive Trades Survey.

The US industrial output in September rose by 0.6% compared with the prior month while a growth by 0.4% was forecasted. The indicator has been growing for two months already. The growth in September returned industrial output to its average of 2007 for the first time since recession. Capacity Utilization Rate increased to 78.3% in September, the highest level since this February – in comparison with 77.9% in August and the forecast of 78%.

Pending home sales declined for the fourth consecutive month in September due to higher mortgage interest rates, higher home prices and budget uncertainty. The Pending Home Sales Index fell by 5.6% in September to 101.6 from a downwardly revised 107.6 in August – which has become the lowest reading since December, 2012. At an annual rate the index fell by 1.2%, which became the first annual decrease for 29 months.

The pound fell after a weak CBI Distributive Trades Survey, the euro also slightly fell. According to the CBI, Realized Sales slumped unexpectedly in October from more than a year height 34 to 4-month low of 2 while a decrease only to 31 was expected. At the beginning of the day the pound rose after Hometrack Housing Prices which showed price growth in October for nine months in a row – by 0.5% at a monthly and by 3.1% at an annual rate.

Bank of England member Miles warned on Monday against premature interest rates increase having called it catastrophic despite recent signs of economic growth. Bank of England Meeting Minutes published last week raised expectations of an earlier start of interest rates increase than in 2016. BOE Chief Economist Spencer Dale also said that the Bank of England wouldn’t raise interest rates until unemployment rate fell significantly in the UK.

Meanwhile, Italian Business Confidence rose to its high in October for more than two years despite weak domestic demand. The index grew to 97.3 from 96.8 in September while index decrease to 96.3 was forecasted.

By MasterForex Company

 

[MasterForex Broker]

Overview of the main economical events of the current day - 30/10/2013

Australian Dollar Fell After RBA Governor Stevens’ Speech

The US dollar grew on Tuesday Vs all major currencies amid 2-day FOMC meeting and bipolar US statistics. House prices rose more than expected but consumer confidence and retail sales in the USA decreased. Australian dollar dropped after RBA governor Glenn Stevens’ speech as he said that Australian dollar’s rate wasn’t supported by macroeconomic indicators.

On Tuesday 2-day FOMC meeting started and on Wednesday evening the central bank will announce monetary policy statement. In spite of the fact that the Fed is expected to keep its stimulus program unchanged the Fed can make a hint that it would start tapering this year in December already.

A positive moment was real estate price growth in American 20 largest cities - S&P/Case-Shiller Home Price Index grew by 12.8% in August at an annual rate in comparison with the expected growth by 12.5%. The indicator’s growth became the strongest since 2006. At the same time the US consumer confidence in October dropped to its low for half a year - CB Consumer Confidence fell to 71.2 p. against 80.2 p. in September while a decrease only to 75 p. was expected.

Retails sales fell by 0.1% in September while no changes were expected. However, the decrease occurred mainly due to auto sales fall by 2.2% - Retail Sales ex Autos rose by 0.4%, which met the expectations. September auto sales data could be distorted due to Labor Day celebration at the beginning of the month.

The euro rocketed after the speech of ECB member Nowotny but then slumped. Nowotny said that there were signs of euro-zone economic recovery and the ECB was unlikely to lower interest rates more. A negative deposit rate is unrealistic. And though the euro growth doesn’t make the central bank happy – it doesn’t require any correction from its side and, besides, the ECB doesn’t have funds to struggle with it. However, he added that the monetary policy should stay mild.

The pound also fell having ignored Mortgage Approvals growth in the UK up to the height since February, 2008. Mortgage Approvals rose to 66.7 thousand in September against 63.4 thousand in October while a growth only to 66 thousand was expected. The data indicate a further recovery at the housing market which is gathering pace. At the same time consumer lending data turned out worse than expected.

Australian dollar fell significantly on Tuesday having dropped to its low for more than two weeks against the US dollar after the speech of RBA governor Glenn Stevens who said that the Australian dollar wasn’t supported by macroeconomic indicators and probably would be considerably lower in future. This statement showed central bank’s concerns over the recent strengthening of Australian currency.

Canadian dollar continued falling. Raw Materials Price Index fell by 1.5% in September while its decrease only by 0.5% was expected. Besides, BoC governor Stephen Poloz in his speech on Tuesday again repeated his recent statement about the refusal of inclination to raise interest rates.

By MasterForex Company