The dollar has pulled back against its major European competitors on Thursday, following comments made by Mario Draghi in defense of the Euro. The comments also sparked a rally in European stock markets and the Spanish 10-year yield dropped more than 30 points to around 6.82 percent, after climbing to a record 7.60 percent earlier in the week.
The European Central Bank President Mario Draghi on Thursday said the bank is prepared to take whatever measures needed to preserve the euro. "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," he told an investment conference in London. "And believe me, it will be enough."
Credit rating agency Egan-Jones downgraded Italy further into 'junk' status amid deteriorating economic situation in Eurozone, reports said Wednesday. Italy's sovereign rating was lowered to CCC+ from B+. The company's previous downgrade of the sovereign was in June.
"Italy's independent ability to support its banks is questionable" given the current weak economic condition, Egan-Jones said.
Moody's Investors Service on Wednesday said it is lowering the rating outlook on 17 German banking groups after cutting the outlook on Germany's sovereign rating earlier this week. The outlooks on the banks were lowered to 'negative.' The affected banks' ratings incorporate support from the German government and/or several German federal states or municipalities, Moody's said.
The dollar pulled back from over a 2-year high of $1.2041 yesterday and reached a one-week low of $1.2328 on Thursday.
Sentiment among German households is set to improve slightly in August with high incomes boosting consumers' willingness to spend on big-ticket items, despite the growing tensions surrounding the prospects of Eurozone's economy. Market research group GfK said its consumer confidence index for August rose to 5.9 from 5.8 in July. Economists had expected the index to hold steady at the July level.
Germany's import price inflation slowed to 1.3 percent annually in June from 2.2 percent in May, Destatis reported Thursday. Economists were forecasting the annual rate to ease to 1.9 percent.
Eurozone's broad monetary aggregate M3 grew at a faster pace of 3.2 percent in June from the previous year, the European Central Bank said Thursday. The growth was forecast to slow to 2.9 percent from 3.1 percent in May.
Unemployment in France increased further in June, data from the Labor Ministry showed late Wednesday. The number of registered job seekers in mainland France rose by 23,700 or 0.8 percent from last month to 2.946 million in June.
The greenback also pulled back sharply in comparison to the pound sterling on Thursday, falling to $1.5722, from Wednesday's high of $1.5457.
Employment in British retail sector increased in the second quarter driven the food sector, the British Retail Consortium (BRC) said Thursday. Retail employment rose 1.8 percent year-on-year in the second quarter, the equivalent of 12,648 more full-time jobs.
The buck has gained some ground versus the Japanese Yen on Thursday, bouncing back from yesterday's low of Y78.040, to around Y78.250.
Fueled by a significant increase in orders for transportation equipment, U.S. durable goods orders increased by much more than expected in June. According to figures released Thursday by the Commerce Department, overall new orders for durable goods came in at $221.6 billion in June, a 1.6 percent increase from May levels.
The increase, which far exceeded economist estimates for 0.6 percent growth, came atop revised figures that showed a 1.6 percent increase in durable goods orders in May, stronger than the 1.1 percent increase initially reported.
First-time claims for U.S. unemployment benefits fell by much more than expected in the week ended July 21st, according to a report released by the Labor Department on Thursday, with claims pulling back near the four-year low set earlier this month.
The Labor Department said initial jobless claims tumbled to 353,000 from the previous week's revised figure of 388,000. Economists had expected jobless claims to edge down to 380,000 from the 386,000 originally reported for the previous week.
Pending home sales in the U.S. unexpectedly showed a notable decrease in the month of June, according to a report released by the National Association of Realtors on Thursday. NAR said its pending home sales fell by 1.4 percent to 99.3 in June after jumping 5.4 percent to a downwardly revised 100.7 in May. The drop came as a surprise to economists, who had expected pending home sales to increase by 0.9 percent.
by RTT Staff Writer
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