The dollar is currently mixed in comparison to its major competitors on Wednesday. The U.S. currency has strengthened versus the Euro, but has weakened slightly versus the pound sterling. The U.S. released a number of economic reports this morning, the results of which were mixed.
Industrial production in the U.S. rose by slightly more than anticipated in the month of July, according to a report released by the Federal Reserve on Wednesday, with the report showing increased output in each of the manufacturing, mining, and utilities sectors. The report showed that industrial production increased by 0.6 percent in July compared to economist estimates for an increase of about 0.5 percent.
Homebuilder confidence in the U.S. has unexpectedly seen a continued improvement in the month of August, the National Association of Home Builders revealed in a report on Wednesday, with the homebuilder confidence index reaching a new five-year high.
The report showed that the NAHB/Wells Fargo Housing Market Index climbed to 37 in August from 35 in July. The increase came as a surprise to economists, who had expected the index to come in unchanged compared to the previous month.
With a continued drop in energy prices offset by higher prices for food, shelter and medical care, the Labor Department released a report on Wednesday showing that U.S. consumer prices unexpectedly came in unchanged in the month of July.
The Labor Department said its consumer price index for July showed that prices were unchanged for the second consecutive month. Economists had been expecting prices to edge up by about 0.2 percent.
Conditions for New York manufacturers have unexpectedly deteriorated in the month of August, according to a report released by the Federal Reserve Bank of New York on Wednesday, with the index of regional manufacturing activity turning negative for the first time in ten months.
The New York Fed said its general business conditions index dropped to a negative 5.9 in August from a positive 7.4 in July, with a negative reading indicating a contraction in regional manufacturing activity. Economists had expected the index to show a much more modest decrease to 7.0.
Greece is set to seek an extension of the austerity programme agreement with its lenders, the Financial Times reported Tuesday citing a document. Prime Minister Antonis Samaras is expected to request a two-year extension, when he meets German Chancellor Angela Merkel and French President François Hollande next week.
According to the proposed plan, Greece hopes to spread its austerity measures over four years. Also, it will request to reduce the deficit cutting target to 1.5 percent point of GDP instead of 2.5 percent under the current plan.
Ireland's first issue of sovereign annuity bonds underlines the improving financing flexibility of the nation, Fitch Ratings said Wednesday. The nation is preparing to issue the bonds to attract life insurers offering European sovereign annuities. But it is still uncertain what degree of market access can be maintained after Ireland's EU/IMF programme expires, Fitch said.
The dollar has extended yesterday's gains against the Euro and has reached a high of $1.2263 on Wednesday.
Policymakers of the Bank of England were unanimous in maintaining quantitative easing at GBP 375 billion early this month, the minutes of the August meeting revealed Wednesday. The meeting was held on August 1 and 2.
The decision to retain the interest rate at a record low 0.50 percent was also unanimous. Policymakers led by governor Mervyn King said they will review the need for more measures in light of the impact of the recently announced credit boosting steps.
The nine-member Monetary Policy Committee discussed whether it was appropriate to expand or continue with the program of asset purchases it had agreed at its previous meeting. The minutes suggest that the central bank is likely to provide more stimulus later this year.
The buck has weakened a bit in comparison to the pound sterling on Wednesday, pulling back from $1.5659, to around $1.5685.
Indicating the remarkable resilience of the U.K. labor market amid a severe recession, the number of Britons seeking jobless benefits unexpectedly declined in July, apparently due to a temporary boost from the Olympics.
The claimant count declined by 5,900 persons monthly to a three-month low of 1.59 million in July. Economists had expected the figure to climb by 6,000. The measure was higher by 35,600 persons from a year ago. In June, the claimant count figure had risen by 1,000.
The claimant count rate was 4.9 percent during the month, unchanged from June. That was in line with economists' expectations.
The greenback is trading nearly unchanged versus the Japanese Yen on Wednesday, holding steady near the 78.925 level.
by RTT Staff Writer
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