The dollar is currently rising against both the Euro and the Japanese Yen on Wednesday, but is losing ground against the pound sterling. The losses against the British currency are due to comments made by Mark Carney during his first speech as head of the Bank of England. However, the gains against the Euro and Yen are due to easing investor concerns over tapering of stimulus measures by the Federal Reserve. Concerns over a potential U.S. strike on Syria and a series of weaker than expected U.S. economic reports is making Fed tapering appear less likely in the near term.
With higher mortgage interest rates slowing the U.S. housing market, the National Association of Realtors released a report on Wednesday showing that pending home sales fell by more than expected in the month of July. NAR said its pending home sales index fell 1.3 percent to 109.5 in July after dipping 0.4 percent to 110.9 in June. Economists had been expecting the index to drop by about 1.0 percent.
While the U.S. made it clear that it is not contemplating any action aimed at a regime change in Syria, Defense Secretary Chuck Hagel said his forces were ready for any contingency involving the country, and were awaiting a presidential order on any options.
Eurozone's second quarter gross domestic product outcome confirmed the European Central Bank's outlook for the economy, ECB Executive Board member Joerg Asmussen reportedly said Tuesday. The ECB expects a very slow recovery in economic activity in the second half of the year, which will continue to pick up in 2014. Asmussen was speaking at an event in the German city of Dautphetal-Buchenau.
The dollar rebounded from an early low of $1.3397 against the Euro on Wednesday and has climbed to around $1.3325.
Sentiment among German consumers is set to ease marginally heading into September after reaching a six year-high in August, with households expecting the economic recovery to be sluggish in the coming months, a survey by market research group GfK revealed Wednesday.
The forward-looking consumer confidence indicator for September slipped to 6.9 from a six year high of 7 in August. The outcome defied expectations for an increase in the indicator to 7.1.
Germany's import prices declined for the seventh consecutive month in July, Destatis reported Wednesday. Import prices dropped 2.6 percent year-on-year, following a 2.2 percent fall in June. The annual rate was slightly steeper than a 2.5 percent fall forecast by economists. At the same time, export prices were down by 0.9 percent compared to a 0.6 percent fall in June.
The number of unemployed in mainland France increased further to a record in July, data released by the Labor Ministry revealed Tuesday. The registered jobless rose by 6,300 from a month ago to 3.286 million in July. The unemployment increased by 0.2 percent from June and 10 percent from the same period of last year.
However, the rate of increase slowed over the past months suggesting that conditions in labor market are improving.
The Bank of England will allow banks that maintain healthy capital to reduce the level of their required liquid asset holdings, releasing GBP90 billion of additional credit.
Bank of England (BoE) governor Mark Carney on Wednesday told a gathering of investors and entrepreneurs that major banks and building societies, which meet the minimum 7 percent capital threshold, will be allowed to cut their holdings of liquid investments.
In his first policy speech as the BoE governor, Carney said that banks have been asked to repair their balance sheets so that their capital ratios at least reach a threshold of 7 percent by the turn of the year.
Also, if the ongoing economic recovery seems to be falling short of the strong growth that is required, the central bank will carefully consider measures to stimulate the recovery further, he said.
The greenback rose to a 2-week high of $1.5426 against the pound sterling Wednesday, but has since pulled back to around $1.5525.
U.K. retail sales volume grew at the strongest pace since November 2012, the Distributive Trades Survey results from the Confederation of British Industry showed Wednesday. According to the survey, 49 percent of respondents reported that sales volumes were up on a year ago, while 22 percent said they were down, giving a balance of +27 percent. The August level exceeded the consensus of 20 percent.
The Bank of Japan will continue quantitative and qualitative easing until inflation stabilizes at 2 percent, Deputy Governor Kikuo Iwata said Wednesday. He reiterated that the BoJ will achieve its 2 percent inflation target at the earliest possible time, with a time horizon of about 2 years.
In a speech to the Kyoto Chamber of Commerce and Industry, Iwata said easing is still in its early stages and it will take time to see the impact of monetary easing on the real economy.
The buck has rebounded from yesterday's 2-week low of Y96.806 against the Japanese Yen to around Y97.650 on Wednesday.
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