Dollar Little Changed Ahead Of Thanksgiving Holiday
November 21 2018 - 9:40AM
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The dollar is turning in a mixed performance against its major
rivals Wednesday afternoon, but remains little changed overall.
Trading activity has been relatively subdued ahead of Thursday's
Thanksgiving holiday. Investors were confronted by a high volume of
U.S. economic data this morning.
A report released by the Commerce Department on Wednesday showed
a much steeper than expected drop in new orders for U.S. durable
goods in the month of October, with the sharp decline largely
reflecting a substantial decrease in orders for transportation
equipment.
The Commerce Department said durable goods orders plunged by 4.4
percent in October following a revised 0.1 percent dip in
September. Economists had expected orders to slump by 2.5 percent
compared to the 0.7 percent increase that had been reported for the
previous month.
A day earlier than usual due to the Thanksgiving Day holiday on
Thursday, the Labor Department released a report on Wednesday
showing first-time claims for U.S. unemployment benefits
unexpectedly edged higher in the week ended November 17th.
The report said initial jobless claims rose to 224,000, an
increase of 3,000 from the previous week's upwardly revised level
of 221,000. Economists had expected jobless claims to slip to
215,000 from the 216,000 originally reported for the previous
week.
After reporting six straight months of decreases, the National
Association of Realtors released a report on Wednesday showing
existing home sales in the U.S. rebounded by more than anticipated
in the month October.
NAR said existing home sales surged up by 1.4 percent to an
annual rate of 5.22 million in October after plunging by 3.4
percent to a rate of 5.15 million in September. Economists had
expected existing home sales to jump by 1.0 percent.
Consumer sentiment in the U.S. unexpectedly deteriorated by more
than initially estimated in the month of November, according to a
report released by the University of Michigan on Wednesday. The
report said the consumer sentiment index for November was
downwardly revised to 97.5 from the preliminary reading of
98.3.
Economists had expected the consumer sentiment index to be
unrevised at 98.3, which was still down slightly from 98.6 in
October.
Pointing to a slowdown in the pace of U.S. economic growth, the
Conference Board released a report on Wednesday showing only a
slight uptick by its index of leading economic indicators in the
month of October.
The Conference Board said its leading economic index inched up
by 0.1 percent in October after climbing by an upwardly revised 0.6
percent in September. The modest increase by the index matched
economist estimates.
According to a media report, the Italian government is likely to
make compromise with the European Union on certain aspects of its
budget.
Investors heaved a sigh of relief after newspaper La Stampa
reported that Italian Deputy Premier Matteo Salvini might be open
to budget revisions.
The report said that Salvini was willing to reduce the planned
spending on a citizen's income and the unwinding of a previous
pension reform. Meanwhile, the European Commission has warned Italy
of financial sanctions over its budget.
The dollar dropped to a low of $1.4249 against the Euro
Wednesday, but has since bounced back to around $1.1385.
The buck slid to an early low of $1.2819 against the pound
sterling Wednesday, but has since rebounded to around $1.2775.
The UK budget deficit in October far exceeded expectations and
was the biggest for the month in three years, raising the
likelihood of the government missing its borrowing target for the
fiscal year, official data showed on Wednesday.
The public sector net borrowing, or PSNB, excluding state banks
was GBP 8.8 billion in October, which was the highest for the month
since 2015, the Office for National Statistics said. Economists had
forecast a deficit of GBP 6.1 billion. In September, the deficit
was GBP 2.84 billion and the shortfall was GBP 7.23 billion in
October 2017.
The greenback has risen to around Y113.065 against the Japanese
Yen this afternoon, from an early low of Y112.698.
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