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Forex News: Dollar Little Changed As Data Fails To Impress

Dollar Little Changed As Data Fails To Impress

04/27/2017 - 14:58:00 (RTTNews)

(RTTNews) - The dollar is turning in a mixed performance against its major rivals Thursday afternoon, but is little changed overall. The buck is paring its early gains against the Euro and the Japanese Yen and is down against the British pound. After a light day on the economic front yesterday, investors had three reports to sift through this morning. However, the results proved to be largely disappointing.

First-time claims for U.S. unemployment benefits unexpectedly increased in the week ended April 22nd, according to a report released by the Labor Department on Thursday. The report said initial jobless claims climbed to 257,000, an increase of 14,000 from the previous week's revised level of 243,000.

The increase surprised economists, who had expected jobless claims to edge down to 241,000 from the 244,000 originally reported for the previous week.

A report released by the Commerce Department on Thursday showed that new orders for U.S. manufactured durable goods climbed by less than expected in the month of March. The Commerce Department said durable goods orders rose by 0.7 percent in March after jumping by a revised 2.3 percent in February.

Economists had expected orders to surge up by 1.2 percent compared to the 1.8 percent increase that had been reported for the previous month.

After reporting a sharp increase in U.S. pending home sales in the previous month, the National Association of Realtors released a report on Thursday showing a pullback in pending sales in the month of March.

NAR said its pending home sales index fell by 0.8 percent to 111.4 in March after jumping by 5.5 to 112.3 in February. Economists had expected pending home sales to drop by 1.0 percent.

The European Central Bank left its key interest rates and the volume of asset purchases unchanged on Thursday and signaled that it was ready to boost stimulus if the economic outlook turned less favorable.

The Governing Council, led by ECB President Mario Draghi, kept all its three interest rates unchanged for a ninth consecutive policy session.

The bank also retained its asset purchases of EUR 60 billion a month till December 2017. The size was reduced in March from EUR 80 billion.

"The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases," the ECB said in a statement.

"If the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration," the bank added.

"Incoming data since our meeting in early March confirm that the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have further diminished," ECB President Mario Draghi said in his introductory statement at the post-decision press conference in Frankfurt.

"At the same time, underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend."

The dollar climbed to a high of $1.0851 against the Euro Thursday, but has since retreated to around $1.0885.

Eurozone economic sentiment rose to its highest level since the middle of 2007 in April with strong improvements in all components, survey data from the European Commission showed Thursday. The economic sentiment indicator climbed to 109.6 from a revised 108 in March. Economists had forecast a modest improvement to 108.2 from March's original 107.9.

German consumer confidence is set to improve markedly in May on the back of stronger economic and income expectations, after two consecutive declines, survey data from the market research group GfK showed Thursday.

The forward-looking consumer confidence index for Germany climbed to 10.2 from April's 9.8 points. Economists had forecast only a modest increase to 9.9 points.

Germany's inflation accelerated more-than-expected in April, after slowing sharply in March, preliminary figures from Destatis showed Thursday. The consumer price index rose 2 percent year-on-year following a 1.6 percent increase in March. Economists had forecast 1.9 percent inflation.

The buck has dropped to nearly a 7-month low of $1.2915 against the British pound Thursday afternoon, from an early high of $1.2839.

Japan's central bank left its monetary policy unchanged on Thursday and policymakers upgraded the view on the economy as they raised the growth forecasts, expecting ultra low interest rates, fiscal stimulus and better demand from abroad to support above-potential expansion in future.

The Bank of Japan policy board, led by Governor Haruhiko Kuroda, voted 7-2 to retain the central bank's target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion.

The BoJ board also voted to retain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The central bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The bank raised the GDP growth forecast for this fiscal year to 1.6 percent from 1.5 percent seen in January. The outlook for next year was increased to 1.3 percent from 1.1 percent. For 2019, the bank projected 0.7 percent growth.

Meanwhile, the inflation forecast for this fiscal was lowered to 1.4 percent from 1.5 percent. The projection for next fiscal year was retained at 1.7 percent. The outlook for fiscal 2019 was 2.4 percent and 1.9 percent after excluding the effects of the planned consumption tax hike.

The greenback rose to a high of Y111.597 against the Japanese Yen Thursday, but has since eased back to around Y111.195.

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