The dollar is gaining ground against the Euro on Wednesday, but is close to unchanged against both the pound sterling and the Japanese Yen. Weak GDP data from the Eurozone is largely responsible for the dollar's strength.
Wholesale inflation remained in check in April. New government figures showed that producer prices fell during the month, spurred lower by a continued slide in energy prices. Meanwhile, core prices showed only a slight advance, keeping pressure off the Federal Reserve to change its low-interest rate stance.
The U.S. Labor Department revealed that producer prices dropped 0.7 percent in April compared to the previous month. The figures were generally in line with what economists had predicted. This followed a decline of 0.6 percent in March and represented the fifth month of declining prices in the last seven.
Manufacturing activity in New York State unexpectedly shrank in May, according to the results of a key regional factory survey released on Wednesday. This was the first time since January that the closely-watched measure had shown contraction. Economists had generally expected the figures to show accelerated growth compared to last month.
The Federal Reserve Bank of New York said its Empire State Manufacturing Index came in at a negative 1.4 for May. This was down from a positive 3.1 in the previous month. Economists had expected the index to rise to a reading of positive 3.75.
Industrial production fell in April, according to new government statistics released Wednesday. This came with another decline in manufacturing output. The figures also indicated that the economy remains sluggish in terms of its resource use.
New data released by the Federal Reserve showed that the output at the nation's mines, utilities and factories fell 0.5 percent in April compared to the previous month. This followed a rise of 0.3 percent in March and an increase of 0.9 percent in February.
U.S. homebuilder confidence rose has risen more than expected in May, as attractive interest rates and a relatively low supply of existing homes has encouraged people to build new dwellings.
Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for May. Analysts were looking for a more modest improvement to a reading of 43 from April's downwardly revised 41.
The dollar has extended yesterday's gains against the Euro on Wednesday, climbing to over a 1-month high of $1.2842.
The euro area economy remained in recession in the first three months of 2013 with the gross domestic product contracting for a sixth consecutive quarter, preliminary estimates from Eurostat revealed Wednesday.
Most of the economies in the single-currency bloc are struggling to recover from the downturn amid stringent austerity. While Germany's economic performance was weaker than forecast by economists, France slipped into recession in the first quarter.
Eurozone's gross domestic product fell 0.2 percent quarter-on-quarter in the first quarter, faster than the expected 0.1 percent contraction. However, the outcome was better than a 0.6 percent decline reported in the fourth quarter of 2012.
The German economy narrowly escaped recession in the first quarter of 2013, but the growth was weaker than forecast, as the country's coldest winter in a century adversely affected economic activity. Meanwhile, France slipped into a recession amid flagging investment and exports.
Germany's gross domestic product grew 0.1 percent quarter-on-quarter in the first quarter, after adjustment for price, seasonal and calendar variations. This was weaker than the 0.3 percent growth forecast by economists.
Meanwhile, the statistical office downwardly revised the GDP data for the fourth quarter of 2012 to show a contraction of 0.7 percent compared with the originally estimated 0.6 percent shrinkage.
The French economy slipped into recession in the first quarter of 2013, preliminary data from statistical office Insee showed Wednesday. The gross domestic product declined 0.2 percent quarter-on-quarter in the first quarter of 2013. This followed a 0.2 percent contraction in the fourth quarter of 2012, which is revised from the previous estimate of 0.3 percent fall.
France's EU harmonized inflation weakened in April to the lowest level in more than three-and-half years, and was slightly below economists' forecast, latest data showed Wednesday. Inflation as per the harmonized index of consumer prices (HICP), measured under the EU methodology, weakened to 0.8 percent in April from 1.1 percent in March, statistical office Insee said. The latest figure was the lowest since November 2009, when prices rose by 0.5 percent.
Sequentially, the HICP edged down 0.1 percent in April, reversing the previous month's 0.8 percent gain, data showed. Economists had forecast the index to stay flat month-on-month.
The Bank of England lifted its estimate for economic growth and forecast inflation to return to its 2 percent target earlier than projected. The BoE forecast economic growth to accelerate to 0.5 percent in the second quarter from 0.3 percent in first quarter of 2013.
However, the recovery is likely to remain weak by historical standards, the bank said in its quarterly Inflation Report. This is the last quarterly report from Governor Mervyn King as he retires at the end of the next month.
The greenback is holding steady around the $1.5200 level against the pound sterling Wednesday, following 4 consecutive days of gains.
Although jobless claims declined more-than-expected in April, British unemployment increased in the first quarter and wage growth was the weakest on record, dampening consumer spending.
The number of people out of work was 2.52 million in the quarter ended March, up 15,000 from October to December period, data published by the Office for National Statistics showed Wednesday.
The increase has lifted the ILO jobless rate by 0.1 percentage points to 7.8 percent in the March quarter. The rate was seen at 7.9 percent. Employment, at the same time, plunged 43,000 to 29.71 million.
The buck is holding steady around the Y102.500 level against the Japanese Yen, which is just slightly above yesterday's high of Y102.415.
Confidence among Japanese consumers declined unexpectedly in April, results of a survey published by the Cabinet Office showed Wednesday. The seasonally adjusted consumer confidence index fell marginally to 44.5 in April from 44.8 in March. Economists expected the index to rise to 45.5.
An index measuring tertiary industry activity in Japan was down a seasonally adjusted 1.3 percent on month in March, the Ministry of Economy, Trade and Industry said on Wednesday, standing at 98.6. That missed forecasts for a decline of 0.7 percent following the 1.1 percent increase in February.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.