USD news - page 22
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US initial jobless claims for the week of Dec 10th are 254K vs. 255K estimate
US continuing claims 2018K vs. 2003K estimate
USD: The 'Trumpflation Trade' Is Still In Full Swing, What's Next?
The FOMC delivered the market a hawkish surprise this week, with the 2017 dots signalling three hikes next year, up from the two signalled in September. USD strength followed, and we think USD/JPY has the furthest to run.
With the BOJ remaining committed to its yield control policy, the widening rates differential is likely to be highly supportive for USD/JPY. Risk sentiment reaction remains important for the cross, but so far seems contained.We are not expecting any surprises from the BOJ next week, and with low easing expectations market reactions should be muted.
We expect USD to outperform over 2017, but unlike 2016 it is likely to be driven more by the fiscal purse rather than monetary policy easing. Stronger global growth momentum than a year ago should also reduce the likelihood of a risk-off environment that caused the position unwind earlier this year.
The “Trumpflation trade” is still in full swing, and as we write this USD crosses are breaking above key levels at an impressive pace.
We expect this to continue into the new year and more so if President-elect Trump passes legislation at a faster pace than the market is expecting. Politics will likely continue to dominate the headlines next year, and we expect EUR to move below parity and GBP to reach new lows.
CAD is likely to outperform AUD and NZD, while SEK and NOK are likely to outperform CHF as their central banks turn more hawkish. Finally, we believe foreign bond flows could have a greater impact on EUR going forward, as the higher FX hedge costs for euro area investors could mean a stronger FX impact from those outflows.
source
November 2016 US housing starts 1.090m vs 1.230m exp
Details of the November 2016 US housing starts and building permits 16 December 2016
The Atlanta Fed GDPNow estimate rises to 2.6% from 2.4% prior
Rebounds on the back of real personal consumption expenditures...
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2016 is 2.6 percent on December 16, up from 2.4 percent on December 14. The forecast of fourth-quarter real personal consumption expenditures growth increased from 2.1 percent to 2.4 percent after yesterday's Consumer Price Index release from the U.S. Bureau of Labor Statistics.
Federal Reserve Chair Yellen is speaking Monday in the US
Janet Yellen is Chair of the Federal Reserve System. The big boss.
December 2016 US Philly Fed non manufacturing index 20.9 vs 10.6 prior
December 2016 US Philly Fed non-manufacturing index 20 December 2016
US MBA Mortgage Applications Rise 2.5%, Yield Trends Dominate Market
The latest Mortgage Bankers Association (MBA) data on mortgage approvals recorded a 2.5% seasonally-adjusted increase for the week ending December 16th, although there was still an annual decline of close to 11%.
Applications to purchase a home increased 3.0% on the week with an annual increase of just below 1.0%.
There has been a further increase in average 30-year mortgage rates to 4.41% in the latest week from 4.28% previously and the highest level since May 2014. The sharp increase in yields over the past few weeks has had a significant impact in curbing activity for first-time buyers and has also had a significant impact at the lower end of the market. There has, however, been resilience at the higher end of the market with rising house prices leading to increases in homeowner equity. The overall loan size also increased to the second highest on record.
Re-finance applications rose 3.0% on the week, the first increase for 11 weeks, but there was still a substantial year-on-year decline and the sharp rise in yields will continue to discourage re-financing in the short term.
Applications for house-purchase will be monitored closely in the short term, especially as the Federal Reserve decision to raise interest rates could either choke-off housing demand on fears over a faster pace of rate increases or lead to a rush of applications looking to lock-in rates before there is a further increase. Overall, there is the potential for only a small decline in mortgage rates to trigger a significant increase in activity.
source
November 2016 US existing home sales 5.61m vs 5.50m exp
Details of the November 2016 US existing home sales data report 21 December 2016
6% of sales were distressed vs 5% prior.
Dollar slips lower but remains near 14-year peak
The dollar slipped lower against the other majors currencies on Thursday, but was still hovering close to a 14-year high as expectations for more U.S. rate hikes continued to support.
Trading volumes were expected to be thin this week as trader were beginning to unwind positions ahead of the Christmas holiday.
EUR/USD rose 0.30% to 1.0457, off Tuesday’s fresh 14-year low of 1.0349.
The greenback remained broadly supported after the Federal Reserve concluded its policy meeting last week by raising interest rates by 25 basis points and projected three more rate hikes for 2017.
Market participants were looking ahead to U.S. reports on jobless claims, durable goods orders, personal spending and economic growth due later in the day.
Elsewhere, GBP/USD edged down 0.13% to 1.2336, still close to Tuesday’s one-month low of 1.2310.
USD/JPY was little changed at 117.55, while USD/CHF shed 0.21% to 1.0247.
The Australian dollar was weaker, with AUD/USD down 0.29% at 0.7212, while NZD/USD added 0.13% to 0.6906.
Meanwhile, USD/CAD gained 0.34% to trade at 1.3457.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% at 102.88, just off Tuesday’s fresh 14-year highs of 103.62.
November 2016 Chicago Fed national activity index -0.27 vs -0.10 exp
November 2016 Chicago Fed national activity index report 22 December 2016