US dollar up on week
March 24, 2006
The US dollar saw gains this week even though new data on new home sales provided a bit of uncertainty on Friday. Much of the greenback’s recovery from losses last week came on comments from new US Federal Reserve Chairman Ben Bernanke’s comments that the economy is healthy, which translated in some people’s minds to an endorsement of the dollar as well. Mr. Bernanke’s comments were also taken by most to mean that interest rates will be going up again when the Fed meets next week, despite the weak home sales data.
The US currency was up 1.3 percent during the week to $1.2028 in relation to the euro. It gained 1.5 percent versus the Japanese yen, to ¥117.57. The dollar added 0.9 percent to $1.7411 versus sterling, and advanced by 1.6 percent to SFr1.3112 in relation to the Swiss franc.
US dollar up on week
March 24, 2006
The US dollar saw gains this week even though new data on new home sales provided a bit of uncertainty on Friday. Much of the greenback’s recovery from losses last week came on comments from new US Federal Reserve Chairman Ben Bernanke’s comments that the economy is healthy, which translated in some people’s minds to an endorsement of the dollar as well. Mr. Bernanke’s comments were also taken by most to mean that interest rates will be going up again when the Fed meets next week, despite the weak home sales data.
The US currency was up 1.3 percent during the week to $1.2028 in relation to the euro. It gained 1.5 percent versus the Japanese yen, to ¥117.57. The dollar added 0.9 percent to $1.7411 versus sterling, and advanced by 1.6 percent to SFr1.3112 in relation to the Swiss franc.
US bond yields lower
March 20, 2006
Yields on US Treasury notes were down on Monday ahead of comments from US Federal Reserve Chairman Ben Bernanke in front of the Economic Club of New York scheduled for Monday evening. Traders hoped that his remarks might shed some light on what the Fed will do about interest rates at its meeting next week.
By late morning in New York, two-year Treasury yields were down 0.4 basis points to a yield of 4.649 percent, while ten-year notes were yielding 4.646 percent, a loss of 3 basis points.
US bond yields lower
March 20, 2006
Yields on US Treasury notes were down on Monday ahead of comments from US Federal Reserve Chairman Ben Bernanke in front of the Economic Club of New York scheduled for Monday evening. Traders hoped that his remarks might shed some light on what the Fed will do about interest rates at its meeting next week.
By late morning in New York, two-year Treasury yields were down 0.4 basis points to a yield of 4.649 percent, while ten-year notes were yielding 4.646 percent, a loss of 3 basis points.
US inflation up only 0.1 percent
March 16, 2006
Inflation was up only slightly in the United States in February as the Consumer Price Index was up by 0.1 percent, down from a rise of 0.7 percent in January. The new data indicates that inflation remains well under control and made some analysts speculate that it won’t be long before the Federal Reserve halts its series of interest rate hikes. While they still expect another rate hike at the end of the month, some analysts now expect that the series of hikes, now at 14 meetings in a row, will pause sooner rather than later.
The core inflation rate, excluding prices on foods and energy, was also up just 0.1 percent, less than the 0.2 percent that had been expected. In the year ending in February, core inflation was up 2.1 percent, while inflation taking in all sectors had risen 3.6 percent in the year.
Even though inflation remains low, however, separate data indicated that wages are not keeping pace with rises in the cost of living.
The new inflation data brought mixed results for the US dollar in currencies markets. At midday in New York, the euro had risen 1.2 percent in relation to the greenback, to $1.2153, while sterling was up 0.5 percent against the dollar to $1.7553. The yen, however, dropped versus the dollar, by 0.5 percent to ¥117.
US bond yields up on data, debt ceiling uncertainties
March 15, 2006
In the US on Wednesday, Treasury notes were affected by a report that showed foreign demand weakening, with purchases by foreign investors at a net $4.4 billion in January, substantially lower than the $18.3 billion in Treasury bonds purchased by foreign investors in December. The December number had been the lowest level of foreign participation in six months. Additionally, The New York Federal Reserve’s Empire State index was up to 31.2 in March, after a previous reading of 21, a far larger jump than had been expected.
Meanwhile, the Treasury Department has asked Congress to raise the debt limit, having already reached the current limit. If Congress does not act by Thursday evening, new sales of two-year and five-year notes, expected to be announced next week, could be put off.
At late morning in New York, yields on two-year Treasury bonds were up 2.1 basis points to 4.67 percent, while ten-year bond yields were up 4.7 basis points to a yield of 4.745 percent.
Current account deficit hurts US dollar
March 14, 2006
The US dollar declined in value on Tuesday on the release of current account deficit data from the fourth quarter of last year, and on a prediction that interest rates in the US could peak at 4.75 to 5 percent.
Investors did not seem to take the current account numbers into consideration last year as the dollar gained 15 percent versus the euro and the yen, but these new numbers, which showed that the fourth quarter current account deficit totaled 7 percent of the gross domestic product triggered some selling of the dollar. One analyst called attention to the fact that this is twice the 3.5 percent of the GDP in 1985 which spurred the G7 to devalue the dollar.
The greenback lost 1.2 percent to ¥117.36 against the Japanese currency. It lost 0.9 percent versus sterling to $1.7475, dropped 0.8 percent in relation to the Swiss franc to SFr1.301, and declined 0.5 percent to $1.2020 against the euro.
Current account deficit hurts US dollar
March 14, 2006
The US dollar declined in value on Tuesday on the release of current account deficit data from the fourth quarter of last year, and on a prediction that interest rates in the US could peak at 4.75 to 5 percent.
Investors did not seem to take the current account numbers into consideration last year as the dollar gained 15 percent versus the euro and the yen, but these new numbers, which showed that the fourth quarter current account deficit totaled 7 percent of the gross domestic product triggered some selling of the dollar. One analyst called attention to the fact that this is twice the 3.5 percent of the GDP in 1985 which spurred the G7 to devalue the dollar.
The greenback lost 1.2 percent to ¥117.36 against the Japanese currency. It lost 0.9 percent versus sterling to $1.7475, dropped 0.8 percent in relation to the Swiss franc to SFr1.301, and declined 0.5 percent to $1.2020 against the euro.
Current account deficit hurts US dollar
March 14, 2006
The US dollar declined in value on Tuesday on the release of current account deficit data from the fourth quarter of last year, and on a prediction that interest rates in the US could peak at 4.75 to 5 percent.
Investors did not seem to take the current account numbers into consideration last year as the dollar gained 15 percent versus the euro and the yen, but these new numbers, which showed that the fourth quarter current account deficit totaled 7 percent of the gross domestic product triggered some selling of the dollar. One analyst called attention to the fact that this is twice the 3.5 percent of the GDP in 1985 which spurred the G7 to devalue the dollar.
The greenback lost 1.2 percent to ¥117.36 against the Japanese currency. It lost 0.9 percent versus sterling to $1.7475, dropped 0.8 percent in relation to the Swiss franc to SFr1.301, and declined 0.5 percent to $1.2020 against the euro.
US trade gap up in January
March 9, 2006
The United States trade deficit grew by $3.4 billion in January from its December level, bringing it to a record level of $68.5 billion as imports grew much faster than exports. The bilateral deficit with China accounted for over a third of the growth in the overall trade deficit, growing from $16.3 billion in December to $17.9 billion in January. Another contributor to the deficit’s growth was oil imports that were up $1.2 billion in the month to $22.6 billion.
Imports into the US were up by $2.6 billion to $182.9 billion in January, while exports from the US to the rest of the world grew by only $2.8 billion to $114.4 billion. With this being the case, exports have to rise at a much higher percentage than imports to simply keep the gap from widening, but American businesses have not been able to keep up.
Some analysts don’t see the growth in the trade deficit turning around anytime in the foreseeable future, citing growing momentum in economies in Europe and Asia. Some policy makers in the US government have blamed the growing deficit on saving in the rest of the world rather than on US over consumption.
US trade gap up in January
March 9, 2006
The United States trade deficit grew by $3.4 billion in January from its December level, bringing it to a record level of $68.5 billion as imports grew much faster than exports. The bilateral deficit with China accounted for over a third of the growth in the overall trade deficit, growing from $16.3 billion in December to $17.9 billion in January. Another contributor to the deficit’s growth was oil imports that were up $1.2 billion in the month to $22.6 billion.
Imports into the US were up by $2.6 billion to $182.9 billion in January, while exports from the US to the rest of the world grew by only $2.8 billion to $114.4 billion. With this being the case, exports have to rise at a much higher percentage than imports to simply keep the gap from widening, but American businesses have not been able to keep up.
Some analysts don’t see the growth in the trade deficit turning around anytime in the foreseeable future, citing growing momentum in economies in Europe and Asia. Some policy makers in the US government have blamed the growing deficit on saving in the rest of the world rather than on US over consumption.
US dollar strengthens
March 7, 2006
Movement in the prices of US Treasury bonds and the expectation of further US interest rate hikes sent the dollar up in European trade on Tuesday. Comments from the president of the St. Louis Federal Reserve that the Fed will have to “step a little harder on the brake” if US economic data stays strong and that it is better to tighten monetary policy more now and then have to backtrack later, had an effect on the dollar’s value. Some analysts said that the comments might mean interest rates higher than the 5 percent most analysts now expect.
The US dollar was up 1.1 cent to $1.1908 in relation to the euro, while it gained 1.4 cents to $1.7354 against sterling and rose 1.2 centimes to SFr1.3100 versus the Swiss franc. The greenback was also up 0.3 cents to C$1.1434 against the Canadian dollar and ¥0.35 higher versus the Japanese yen, to ¥117.88.
Elsewhere, both the New Zealand and Australian dollars fell in relation to the US dollar. The Australian dollar dropped 0.5 cent to $0.7353 versus the greenback, while the New Zealand dollar hit an 18-month low against the US dollar, falling 0.8 cent to $0.6486 in relation to the US currency.
US Treasury yields fall
March 7, 2006
Prices were up and yields fell on US Treasury bonds on Tuesday after four straight days of price declines. Early in the day in New York, yields hit their highest levels in almost two years, with ten-year bonds yielding 4.805 percent and two-year issues at a yield of 4.809 percent. By midday, however, ten-year yields had dropped 1.6 basis points to 4.738 percent. Two-year yields were about the same at 4.775 percent. The price rises came after an attempt to reverse the current yield curve inversion were not successful.
Dollar down on week despite late-week gains
March 3, 2006
While the US dollar saw gains on Friday as new data from the service sector was more positive than had been expected, it still was down over the week as a whole. The greenback lost 0.5 percent on the week to sterling, to $1.7537, and it ended the week down 1.3 percent to C$1.1343 in relation to the Canadian dollar, a 14-year low. The strong Canadian dollar was being driven by strong economic growth and the expectation of another rise in interest rates to come.
Dollar down on data, politics
March 1, 2006
The US dollar also declined again as investors continued to react to Tuesday’s dollar-negative economic data. The greenback lost 0.15 cents to $1.1933 in relation to the euro and dropped 0.25 cents to $1.7558 against sterling. Analysts said that among the things holding the US currency back were the efforts to stop the move by the United Arab Emirates to buy several US ports, as well as US attempts to call China a currency manipulator.
Spending up, savings down in US
March 1, 2006
Personal spending in the United States was up 0.9 percent in January, according to new data from the US Commerce Department, while personal income increased by only 0.7 percent in the month. The rise in spending was up a bit less than had been expected, while the increase in spending was somewhat more than expectations. Both figures increased more than they had since last summer, indicating that the US economy has gained new momentum after weak performance in the last quarter of 2005.
The rate of savings in the US, however, was down to minus 0.7 percent in January after having hit minus 0.4 percent in December. A minus reading in this category means that consumers are spending savings in order to make purchases. Analysts expect that as the housing market slows, energy prices decline, and income grows, personal savings will begin to increase.
Meanwhile, personal consumption expenditures (PCE) inflation was up 0.5 percent in January after holding steady in December. This meant that real spending growth was 0.4 percent in the month. The core rate, which excludes food and energy expenditures, was up only 0.2 percent, however. This meant that the core PCE in the year ending in January was up 1.8 percent, down from 1.9 percent in the year which ended in December. This meant that the Federal Reserve’s favored measure of inflation remained in their stated preferred zone of 1 percent to 2 percent.
Advertisement
