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Daily Afternoon Report 31.05.2016 by TradersTrust

The dollar held steady at two-month highs against the other major currencies on Tuesday, after the release of positive U.S. data and investors were still eyeing the release of reports on manufacturing activity in the Chicago area and U.S. consumer confidence.

USD/JPY was steady at 111.15, just below Monday’s three-week highs of 111.44.

The U.S. Commerce Department said that personal spending climbed by 1.0% last month, above expectations for a gain of 0.7%. Personal spending for March rose 0.1%.

Personal income, meanwhile, rose by 0.4%, in line with forecasts and after rising 0.4% a month earlier.

The dollar has remained broadly supported since Federal Reserve Chair Janet Yellen said on Friday that it would be appropriate for the central bank to raise rates “gradually and cautiously” in the coming months if the economy and the labor market continue to pick up as expected.

But the yen also strengthened after data overnight showed that Japanese factory output unexpectedly rose in April despite a series of earthquakes in the south of the country.

The data tempered expectations that the Bank of Japan could ramp up its monetary easing as soon as next month after Prime Minister Shinzo Abe on Monday announced plans to delay a scheduled sales tax increase.

EUR/USD was little changed at 1.1147, off Monday’s 10-week lows of 1.1097.

Eurostat reported earlier that euro zone consumer price inflation fell by 0.1% this month, in line with forecasts, and following a final reading of a 0.2% drop in April.

Core CPI, which excludes food, energy, alcohol, and tobacco costs increased by 0.8% in May, also in line with expectations and up slightly from 0.7% a month earlier.

The dollar was steady against the pound, with GBP/USD at 1.4640 and lower against the Swiss franc, with USD/CHF down 0.14% at 0.9907.

The Australian Bureau of Statistics said on Tuesday that building approvals increased by 3.0% in April, confounding expectations for a 3.0% drop.

A separate report showed that Australia’s current account deficit narrowed to A$20.8 billion in the first quarter from A$22.6 billion in the fourth quarter of 2015.

In New Zealand, data showed that the ANZ business confidence index climbed to 11.3 in May from a reading of 6.2 the previous month.

Elsewhere, USD/CAD edged up 0.19% to trade at 1.3072 after official data showed that Canada’s gross domestic product fell 0.2% in March, compared to expectations for a 0.1% slip and after a 0.1% fall the previous month.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 95.64, close to the previous session’s two-month peak of 95.96.

Disclaimer: The content in this article is Investment Research and should not be construed as containing Investment Advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. TTCM Traders Trust Capital Markets Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

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