Dollar Mostly Lower After Data Disappoints
January 15 2016 - 9:26AM
RTTF2
The dollar is losing ground against the Euro and the Japanese
Yen Friday afternoon, but is up against the British pound.
Investors were inundated with U.S. economic data this morning,
after a trading week that had been extremely light on data. Once
they were able to sift through the numerous reports, what they
discovered was a number of disappointing results.
Retail sales in the U.S. saw a modest decrease in the month of
December, according to a report released by the Commerce Department
on Friday. The report said retail sales edged down by 0.1 percent
in December following an upwardly revised 0.4 percent increase in
November.
Economists had expected sales to come in unchanged compared to
the 0.2 percent uptick originally reported for the previous
month.
With utilities output showing another substantial decrease, the
Federal Reserve released a report on Friday showing that U.S.
industrial production fell by more than expected in the month of
December. The report said industrial production dropped by 0.4
percent in December after slumping by a revised 0.9 percent in
November.
Economists had expected production to dip by 0.2 percent
compared to the 0.6 percent decrease originally reported for the
previous month.
Reflecting steep drops in prices for food and energy, the Labor
Department released a report on Friday showing that U.S. producer
prices fell by slightly more than expected in December. The Labor
Department said its producer price index for final demand dipped by
0.2 in December after rising by 0.3 percent in November. Economists
had expected prices to edge down by 0.1 percent.
Manufacturers in New York State saw a sharp deterioration in
business conditions in January, results of a key regional survey
showed Friday. Results were well below what economists were
predicting and marked the lowest levels in about 7 years. The
figures also showed a multi-year low in optimism.
The Federal Reserve Bank of New York said that its Empire State
index came in at negative 19.37 for January. This was down sharply
from the reading of negative 6.21 in December. Economists had
expected January's figure to improve slightly to negative 4.
Reflecting more positive expectations for future economic
growth, the University of Michigan released a report on Friday
showing that U.S. consumer sentiment has improved for the fourth
straight month in January.
The preliminary report said the consumer sentiment index climbed
to 93.3 in January from the final December reading of 92.6.
Economists had expected the index to inch up to 93.0.
Business inventories in the U.S. unexpectedly saw a modest
decrease in the month of November, according to a report released
by the Commerce Department on Friday. The report said business
inventories dipped by 0.2 percent in November after edging down by
a revised 0.1 percent in October.
Economists had expected inventories to come in unchanged,
matching the reading originally reported for the previous
month.
The dollar dropped to over a 2-week low of $1.0984 against the
Euro Friday, but has bounced back to around $1.0935 this
afternoon.
The euro area trade surplus hit a nine-month high in November as
exports increased amid fall in imports, Eurostat reported Friday.
The trade surplus rose to a seasonally adjusted EUR 22.7 billion
from EUR 19.8 billion in October. This was the highest since
February, when it totaled EUR 23.1 billion. Also, it stayed above
the expected level of EUR 21 billion.
Demand and availability for unsecured lending increased notably
in the fourth quarter, the latest Credit Conditions Survey from the
Bank of England showed Friday.
Banks reported a significant increase in demand for unsecured
lending in the fourth quarter. It was expected to increase again in
the first quarter.
Demand for buy-to-let lending increased significantly in the
fourth quarter, the bank said.
Meanwhile, demand for credit card lending fell notably at the
end of the year, but lenders expected this to reverse in the first
quarter.
Further, lenders said the availability of unsecured credit to
households especially personal loans increased in the fourth
quarter.
The buck has climbed to over a 5-year high of $1.4261 against
the pound sterling this afternoon, from around $1.4430 this
morning.
U.K. construction output dropped unexpectedly in November,
figures from the Office for National Statistics revealed Friday.
Construction output fell 0.5 percent month-on-month in November,
reversing a 0.2 percent rise in October. Economists had forecast a
0.5 percent rise for November.
The greenback has dropped to a 5-month low of Y116.501 against
the Japanese Yen Friday, from around Y117.800 this morning. The Yen
is benefitting from its safe haven status on an extremely weak day
for global equity markets.
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