• American focus: the Canadian dollar strengthened significantly against the US dollar

Noticias del mercado

25 febrero 2016

American focus: the Canadian dollar strengthened significantly against the US dollar

The dollar traded mixed against the euro, but generally stayed in a small range. The dynamics of trading dictate risk appetite, statements by the Federal Reserve and US statistics. Today the president of Federal Reserve Bank of St. Louis James Bullard said inappropriate prediction of rate increases. He added that since the Fed's policy is determined by the incoming data, the decline in inflation expectations and financial markets means that the Central Bank has more room to maneuver within the framework of the normalization of monetary policy. Meanwhile, the chairman of the Federal Reserve Bank of Atlanta Dennis Lockhart said that an increase in US interest rates could have a negative impact on bank profits. "The Fed will decide on a further increase in interest rates on the basis of data This drop in fuel prices and slowing growth in China have complicated the assessment of the US economic outlook.", - He added. The next FOMC meeting will be held March 15-16. the average market estimates the chances of a rate hike in March, only 6%. In general, the chances of growth rates are measured in less than 50% of 2016 year.

With regard to statistics, the Labor Department reported that the number of initial applications for unemployment benefits rose last week, although the overall level remained unchanged amid growing labor market. Primary applications for unemployment benefits, layoffs indicator increased by 10,000 and reached a seasonally adjusted 272,000 for the week ended February 20. Economists forecast 270,000 hits. The four-week moving average of applications, which smooths the volatile weekly data, fell by 1,250 to 272,000, the lowest level since mid-December. Repeated requests for unemployment benefits fell by 19,000 to 2.253 million in the week to 13 February.

Another report showed that orders for durable goods in the US rose in January, the most since August 2014, reflecting a pause in the decline in production. Orders for non-military equipment, except for commercial aircraft, jumped by 3.9 percent, more than forecast, after a decline of 3.7 percent in December, which was lower than previously reported. Orders for durable goods rose by 4.9 percent.


The pound depreciated moderately against the dollar, returning to opening levels. Initially, the pound rose to $ 1.4000 against the background of general decline in the US currency and data on UK GDP, but after the publication of data on US demand for the dollar has returned. Recall, the Office for National Statistics (ONS) reported that the UK economy expanded in line with the preliminary estimates in the fourth quarter. Gross domestic product grew 0.5 percent sequentially, according to preliminary estimates published on 28 January. The growth was slightly faster than the expansion of 0.4 percent in the third quarter. On an annual basis, GDP grew by 1.9 percent, according to the previously published estimates. In the fourth quarter, output in the service sector rose by 0.7 percent sequentially, according to preliminary estimates. Output in the service sector grew by 2.5 percent in 2015 after rising 3.3 percent the previous year. In the 4th quarter, business investment expanded by 2.4 per cent compared with last year. In 2015, investments grew by 4.7 per cent.


The Canadian dollar rose substantially against the US dollar, reaching a peak from December 9, 2015, which was caused by the triggering of stop orders at CAD1.3600 level and the resumption of growth in oil prices. I stand by commodity currencies also have comments from the central bank of China that the country can increase the budget deficit to 4% of GDP. In an article published in "The Economic Daily", said that according to research by the head of the Central Bank of China and expert statistical department Sheng Songchena, deficit increase will not be large risk of insolvency for the government. China raised its budget deficit to 2.3 percent of GDP in 2015 from 2.1 percent in 2014. Usually, the 3 per cent deficit level is considered a "red line" that must not be crossed. But Sheng said that there should be universal "dangerous" level. "Most likely, the deficit to GDP ratio should be determined by a country's balance of debt and the structure, economic conditions and interest rates, - he said the 3 per cent." Dangerous "level does not match the reality of China." In support of their point of view Sheng refers to a relatively small debt of China, a rational structure, the continuing growth of budget revenues and safe assets state-owned firms.

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