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Dollar Holding Gains After Beige Book Release


The dollar got off to a positive start Wednesday, after investors reacted positively to yesterday's speech by President Trump before Congress. The stock is off its early highs, but remains positive following the release of the Beige Book.

The U.S. economy continued to pick up steam in February, with all twelve of the Federal Reserve's districts reporting "modest to moderate" growth, according to the Fed's Beige Book.

However, business optimism cooled a bit amid opposition to President Donald Trump's border-tax proposal from several industries.

Anecdotally, manufacturers around Dallas said customers were taking a "wait and see" approach to the Trump White House.

Elsewhere, there were concerns about the administration's tax policies, as the president has yet to offer many specifics.

While the Commerce Department released a report on Wednesday showing a slightly bigger than expected increase in U.S. personal income in the month of January, the report also showed that personal spending rose by less than expected.

The report said personal income climbed by 0.4 percent in January after rising by 0.3 percent in December. Economists had been expecting another 0.3 percent increase.

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent in January after climbing by 0.5 percent in the previous month. Spending had been expected to rise by 0.3 percent.

Growth in U.S. manufacturing activity accelerated by much more than anticipated in the month of February, the Institute for Supply Management revealed in a report on Wednesday.

The ISM said its purchasing managers index climbed to 57.7 in February from 56.0 in January, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 56.4.

Construction spending in the U.S. unexpectedly decreased in the month of January, according to a report released by the Commerce Department on Wednesday.

The report said construction spending slumped by 1.0 percent to an annual rate of $1.180 trillion in January from the revised December estimate of $1.192 trillion. Economists had expected spending to climb by 0.6 percent.

The dollar climbed to nearly a 1-week high of $1.0513 against the Euro Wednesday morning, but has since retreated to around $1.0555.

Eurozone manufacturing activity gathered further momentum in February but the pace of growth was slightly slower than the initial estimate, final data from IHS Markit showed Wednesday. The manufacturing Purchasing Managers' Index rose to 55.4 in February from 55.2 in January. This was the highest reading since April 2011 but slightly below its earlier flash estimate of 55.5.

Germany's inflation accelerated more-than-expected in February to its highest level since the middle of 2012, preliminary figures from Destatis showed Wednesday. The flash consumer price index inflation rose to 2.2 percent from 1.9 percent in January. Economists had forecast 2.1 percent inflation.

Germany's unemployment dropped marginally in January, the labor force survey from Destatis showed Wednesday. The jobless rate fell to 3.8 percent in January from 3.9 percent in December. In the same period of previous year, the rate was 4.4 percent.

Germany's jobless claims declined more than expected in February, reports said citing data from the Federal Labor Agency. The number of people out of work decreased by 14,000 from January, compared to the expected fall of 10,000.

The jobless rate held steady at a record low 5.9 percent in February. The rate came in line with expectations.

The buck rose to a 3-week high of $1.2278 against the pound sterling Wednesday, but has since slipped to around $1.23.

British manufacturing sector expanded at the slowest pace in three months in February, survey results from IHS Markit and the Chartered Institute of Procurement & Supply showed Wednesday. The Markit/CIPS purchasing managers' index for the manufacturing sector dropped to 54.6 in February from 55.7 in January.

UK mortgage approvals increased to a near one-year high in January, figures from the Bank of England showed Wednesday. The number of loans approved for house purchases rose to 69,928 from 68,266 in December. This was the fourth consecutive increase and reached its highest level since February 2016.

UK house price growth increased unexpectedly in February, data published by the Nationwide Building Society showed Wednesday. House prices advanced 4.5 percent year-on-year in February, faster than the prior month's 4.3 percent increase. The growth rate was expected to ease to 4.1 percent.

UK shop prices declined as a slower pace in February as food prices logged an annual growth, figures from the British Retail Consortium showed Wednesday. Shop prices declined 1 percent year-on-year in February, followed by a 1.7 percent drop in January. Economists had forecast a 1.4 percent drop.

The greenback climbed to nearly a 2-week high of Y114.045 against the Japanese Yen Wednesday, but has since eased back to around Y113.670.

The manufacturing sector in Japan continued to expand in February, and at a faster rate, the latest survey from Nikkei showed on Wednesday with a manufacturing PMI score of 53.3. That was up from 52.7 in January, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Overall capital spending in Japan was up 3.8 percent on quarter in the fourth quarter of 2016, the Ministry of Finance said on Wednesday. That exceeded forecasts for 0.8 percent following the 1.3 percent decline in the third quarter.

by RTTNews Staff Writer

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