• Foreign exchange market. American session: the U.S. dollar traded mixed to lower against the most major currencies after the mixed U.S. economic data

Market news

18 September 2014

Foreign exchange market. American session: the U.S. dollar traded mixed to lower against the most major currencies after the mixed U.S. economic data

The U.S. dollar traded mixed to lower against the most major currencies after the mixed U.S. economic data. The U.S. housing starts in August dropped by 14.4% to a seasonally adjusted annual rate of 956,000 units from 1.117 million units in July, missing expectations for a decline to 1.040 million. July's figure was revised up from 1.093 million units.

The number of building permits in August fell by 5.6% to 998,000 units from 1.057 million units in July. July's figure was revised up from 1.052 million units. Analysts expected building permits to decrease to 1.040 million units.

Philadelphia Fed manufacturing index declined to 22.5 in September from 28.0 in August, missing forecasts of the fall to 22.8.

The number of initial jobless claims in the U.S. in the week ending September 13 dropped by 36,000 to 280,000. The previous week's figure was revised to 316,000 from 315.000.

Yesterday's results of the Fed's monetary policy meeting weighed on the greenback. The Fed kept its interest rate unchanged at 0.00-0.25%, but it cut its asset purchase program by another $10 billion to $15 billion. The Fed added it want to close its asset purchase program in the next month.

The Fed also said it will keep its interest rate unchanged for "a considerable time after the asset purchase program ends".

The Fed noted "there remains significant underutilization of labor resources".

The euro traded higher against the U.S. dollar. The European Central Bank said today it allotted €82.6 billion in its new Targeted Long Term Refinancing Operation (TLTRO). Analysts had expected €174 billion.

The British pound traded higher against the U.S. dollar. The Scotland's independence referendum weighed on the pound.

The U.K. retail sales increased 0.4% in August, in line with expectations, after a flat reading in July. July's figure was revised down from a 0.1% rise.

On a yearly basis, retail sales in the U.K. climbed 3.9% in August, after a 2.5% gain in July. July's figure was revised down from a 2.6% increase.

The Confederation of British Industry released its industrial order books balance. The CBI industrial order books balance dropped to -4% in September from +11% in August, missing expectations for a decrease to +9%.

The Swiss franc rose against the U.S. dollar after the Swiss National Bank's (SNB) interest rate decision. The SNB kept its interest rate unchanged at 0.00 - 0.25% and also kept the exchange rate floor unchanged at 1.20 francs per euro.

Switzerland's central bank said "will continue to enforce the minimum exchange rate with the utmost determination".

The Canadian dollar traded higher against the U.S. dollar after the better-than-forecasted foreign securities purchases from Canada. Foreign securities purchases in Canada climbed by C$5.30 billion in July, exceeding expectations for a rise of C$2.47 billion, after a C$1.08 billion rise in June. June's figure was revised down from - C$1.07 billion.

The New Zealand dollar traded higher against the U.S dollar. The better-than-expected gross domestic product (GDP) from New Zealand supported the kiwi. New Zealand's GDP rose 0.7% in the second quarter, exceeding expectations for a 0.6% increase, after a 1.0% gain in the first quarter.

On a yearly basis, New Zealand's GDP climbed by 3.9% in the second quarter, after a 3.8% rise in the first quarter.

The Australian dollar traded higher against the U.S. dollar. The Fed's interest rate decision weighed on the Aussie.

The Reserve Bank of Australia (RBA) released its bulletin today. The RBA said spare capacity in the Australian labour market has risen over the past few years.

The Japanese yen traded mixed against the U.S. dollar. Japan' trade deficit declined to ¥948.5 billion in August from ¥1,023.8 billion, beating expectations for a decline to a deficit of ¥990.0 billion.

The Bank of Japan (BoJ) Governor Haruhiko Kuroda on Thursday reiterated the central bank will adjust its monetary policy if needed to reach the 2% inflation target. He believes that Japan can reach a 2% inflation target at around fiscal 2015 to March 2016.

Mr. Kuroda also said that he is optimistic on a recovery of Japan's exports.

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