The dollar strengthened against its peers to 2.5 week highs as the market overlooked varied US economic data. US jobless claims filed for last week dropped 13,000 from the previous week’s total of 266,000 to total 253,000 while experts forecast an increase of 3,000. The US consumer price index inched up 0.1% in March compounding forecasts for a rise of 0.2% following a 0.2% decline in February. Core CPI excluding food and energy was up 0.1% in March while experts forecast a gain of 0.2% following an increase of 0.3% in February. The dollar’s recovery was aided by data released out of China which revealed that Chinese exports posted a 9 month high in March, lessening fears of lagging global growth with China at the helm. The US dollar index was up 0.17% trading at 94.97 closing in on its 2.5 week high of 95.21 reached earlier in the day.
The euro weakened against the dollar with the pair down 0.17% trading at 1.1256 off its session high of 1.1294 after having come off its session low of 1.1233 reached earlier in the day. The pair traded below its 6 month high of 1.1464 reached on Tuesday. The euro zone consumer price index posted no change registering at 0% while experts forecast a decline of 0.1% in March. The dollar has started to regain its strength after weakening for 2 weeks with euro weakness pushing the pair lower. For some time now the European Central Bank has been under pressure as a result of lack of inflation in the euro zone. German CPI data released last week showed some improvement.
The pound weakened against the dollar with the pair down 0.30% trading at 1.4162 off its session low of 1.4089 after having come off its session high of 1.4206 reached earlier in the day. Before ticking lower the pound held above the day’s lows after the Bank of England announced that it was keeping its key interest rate at 0.5% where it has remained for the last 7 years. All members of the central bank’s monetary policy committee voted for no adjustments to be made to its 375 billion pound asset purchase program. Uncertainty over Britain’s future in the European Union has started to adversely affect the economy and the BOE could slash rates to new lows in order to ward off deflationary risks.
The yen strengthened against the dollar with the pair down 0.14% trading at 109.19 off its session low of 108.89 after having come off its session high of 109.54 reached earlier in the day, still far above the 17 month low of 107.62 hit on Monday. The yen has gained significantly against the dollar over the last few weeks as the market has sought to buy more of it. The yen’s traditional safe haven status has seen its demand spillover as the market is unsure of what to invest in amid global market and banking sector uncertainty. The yen changed direction this week after rallying all throughout March leading to predictions the Bank of Japan will intervene to weaken the overvalued yen.
The Australian dollar strengthened while the New Zealand and Canadian dollars weakened against the greenback. Oil prices were virtually unchanged following a varied report from the International Energy Agency which highlighted doubt as to whether the upcoming meeting between major oil producers will be successful in addressing the global supply surplus. The IEA fears that impact will be minimal if there is a production halt instead of a reduction. US crude was last down 0.05% trading at $41.74 per barrel.
The Aussie gained 0.73% against the greenback with the pair trading at 0.7709 off its session high of 0.7736 after having come off its session low of 0.7619 reached earlier in the day. The Australian Bureau of Statistics released data which revealed that the number of employed individuals in Australia increased by 26,100 in March surpassing forecasts for a rise of 20,000. The kiwi dollar declined 0.71% against the greenback with the pair trading at 0.6871 off its session low of 0.6823 after having come off its session high of 0.6919 reached earlier in the day. The loonie dropped 0.14% against the dollar with the pair trading at 1.2834 off its session low of 1.2781 after having come off its session high of 1.2897 reached earlier in the day. The pair had risen 0.37% to trade at 1.2863 following the release of data which revealed that Canada’s new house price index gained 0.2% in February beating forecasts for a rise of 0.1% after a 0.1% uptick in January.
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