The dollar rose against other major currencies after official data was released showing that the US private sector opened 177,000 jobs in August while analysts expected growth of only 175,000 after a gain of 194,000 jobs in July. Forex pair EUR/USD fell to 1.1131. The US currency rose against the Yen, Pound and Swiss Franc. USD/JPY climbed to 103.42, GBP/USD fell to 1.3085, and USD/CHF jumped to 0.9845. USD/CAD rose to 1.3124, AUD/USD fell to 0.7500, while the NZD/USD dropped to 0.7235. Canadian gross domestic product rose in July by 0.6 percent after falling 0.6 percent in the previous month. Economists had predicted growth of 0.4 percent. Preliminary data showed that industrial production in Japan remained unchanged in July despite the predicted growth of 0.8 percent after rising 2.3 percent in the previous month. The number of new houses in Japan rose in the second quarter to 8.9 percent from minus 2.5 percent in the previous quarter, while analysts expected growth of 7.4 percent. Retail sales in Germany rose in July to 1.7 percent, after falling 0.6 percent in the previous month, while analysts expected growth of 0.5 percent. The unemployment rate in the Eurozone was unchanged.
US stocks on Wall Street have fallen because of better than expected data on the consumer confidence index. This raise in consumer confidence in the United States prompted concerns that the Federal Reserve could increase interest rates in September. The Dow Jones was down 0.26 percent, the S&P 500 dropped 0.20 percent, while the NASDAQ was lower by 0.18 percent. Official data showed that the consumer confidence index in the US rose in August to 101.1 points from 96.7 in July, while economists had expected growth to 97.0 points. Vice President of the Fed, Stanley Fischer, said yesterday that the US labor market was close to full employment and that the pace of raising interest rates depends on the state of the economy.
Asian stocks were mixed. The Japanese Nikkei 225 index rose 0.79 percent and ended trading Wednesday with nearly one percentage gain (0.97%). This was mostly contributed to the growth of action in the shipbuilding sector, transportation, and electricity generation. Index volatility has dropped nearly one percent to 22.7. The Hang Seng index in Hong Kong climbed 0.08 percent, while Australia's S&P/ASX 200 was lower by 1.07 percent. European stocks fell. Euro Stoxx 50 was down 0.03 percent, France's CAC 40 rose 0.04 percent, Germany's DAX 30 was lower by 0.20 percent, while London's FTSE 100 fell 0.18 percent.
The Australian dollar was steady against other major currencies after data was released showing the total amount of new loans issued to consumers and businesses in Australia increased in July. Forex pair AUD/USD recorded a peak of 0.7532 and subsequently consolidated at 0.7521. Data showed that the total amount of new loans issued to consumers and businesses in Australia rose in July by 0.4 percent, after rising 0.2 percent in the previous month, which was in accordance with the projections. In relation to the Euro, the Australian dollar has strengthened. EUR/AUD dropped to 1.4813. The unemployment rate in Germany remained unchanged in July at 6.1 percent, which was in line with predictions. The number of unemployed fell in July to 7,000 people after the fall of 8,000 in the previous month. Analysts had expected a decline of 5,000. A report on the Euro area showed that consumer price inflation rose in August by 0.2 percent, short of the predicted 0.3 percent rise, and following an increase of 0.2 percent in July. Core inflation, which excludes prices of food, energy, alcohol and tobacco, rose 0.8 percent after rising 0.9 percent in July. The Australian dollar rose against the yen. AUD/JPY climbed to 77.53. Against the pound, the Euro fell but rose against the Yen and the Franc. EUR/GBP dropped to 0.8477, EUR/JPY jumped to 115.02, and the EUR/CHF has risen to 1,0966. Jedinstvena currency rose against the Canadian dollar but fell to New Zealand. EUR/CAD jumped to 1.4594 and EUR/NZD fell to 1.5366.
The British pound last week fell against the dollar despite positive economic results. The British economy based on imports is also putting significant pressure on sterling. Britain has significantly higher imports than exports of goods and is therefore heavily dependent on foreign investment. The referendum, however, has raised concerns that future foreign investment will be significantly reduced. The Bank of England’s Inflation Report, however, showed that the fall of the pound may be considered positive when it comes to foreign investment because of cheaper exports. The pair GBP/USD continued the downward trend that begun on Friday. The sharp rise of the dollar had a negative impact on the movement of this currency pair, despite the positive economic results published last week in the UK. From the beginning of the week, the British pound is moving in a relatively narrow range in the morning. A report published in the UK stated the index of house prices in August performed better than expected which had a positive result on the British currency. USD/CHF continued to grow after a minor consolidation and increased last week as the Swiss currency had the biggest decline among all major currencies. Fluctuation of the dollar will likely continue until the end of the week, especially on Friday amid the expected publication of the relevant reports from the US labor market.
All currency pairs and the stocks explained during this trading week. Investors will watch for the NFP to be published on Friday. This data could push the US dollar higher/lower against the major currency pairs.