The Euro rallied against the greenback for the second day to reach a high of 1.5084, and the single-currency looks poised to test the yearly high at 1.5146 as the economic docket reinforces an improved outlook for future growth.
Talking Points
• Japanese Yen: BoJ Holds at 0.10%, Offers JPY 10T in New Lending
• Pound: U.K. Manufacturing Expands at Slower Pace
• Euro: Unemployment Rate Hits 11-Year High
• US Dollar: ISM Manufacturing, Construction Spending on Tap
Euro Poised to Test Yearly High, British Pound to Hold Broad Range
The Euro rallied against the greenback for the second day to reach a high of 1.5084, and the single-currency looks poised to test the yearly high at 1.5146 as the economic docket reinforces an improved outlook for future growth. Manufacturing activity in the Euro-Zone expanded at a faster pace in November, with the index rising to 51.2 from 50.7 in the previous month, while the PMI reading for Germany increasing to 52.4 from 51.0 in October.
Moreover, the German economy unexpectedly added 7K jobs in November, which lowered the annual rate of unemployment to 8.1% from a revised reading of 8.2% in the previous month, while retail consumption increased 0.5% in October to top forecasts for a 0.4% rise. The breakdown of the report showed sales excluding cars rose at a nominal rate of 0.6% during the month, while discretionary spending on clothing and shoes jumped 8.5% after advancing 2.9% in September, and the conditions are likely to improve going into the following year as the expansion in monetary and fiscal policy works its way through the real economy. Meanwhile, the jobless rate in the euro-region held steady at an 11-year high of 9.8% for the second consecutive month in October follow the revision in the previous month’s reading, and expectations for higher unemployment may continue to drag on the outlook for future growth as policy makers see a risk for a protracted recovery.
The British Pound halted the three-day decline against the U.S. dollar and bounced back to reach a high of 1.6579 during the European trade however, the lack of momentum to cross back above the 20-Day SMA at 1.6628 could hold the GBP/USD within a narrow range over the remainder of the week as investors weigh the outlook for future policy. Meanwhile, the Nationwide house price index increased 0.5% for the second consecutive month in November, while the annualized rate increased 2.7% from the previous year versus forecasts for a 2.4% rise, and the data reinforces an improved outlook for the U.K. housing market as the government takes unprecedented steps to steer the economy out of recession. However, manufacturing activity in the U.K. unexpectedly expanded at a slower pace in November, with the PMI slipping to 51.8 from a revised reading of 53.4 in the previous month, and businesses may keep a lid on production going into the following year as policy makers hold a weakened outlook for private sector spending.
The greenback weakened against most of its major counterparts following the rise in risk appetite, and the reserve currency may face increased selling pressures going into the North American trade as equity futures foreshadow a higher open for the U.S. market. Nevertheless, manufacturing activity in the world’s largest economy is anticipated to expand at a slower pace in November as economists forecast the ISM index to weaken to 55.0 from 55.7 in the previous month, while construction spending is expected to contract 0.5% in October after advancing 0.8% in the previous month. At the same time, pending home sales are projected to fall 1.0% after surging 6.1% in the previous, and the data could spark increased selling pressures for the dollar as investors weigh the prospects for a sustainable recovery.
• Japanese Yen: BoJ Holds at 0.10%, Offers JPY 10T in New Lending
• Pound: U.K. Manufacturing Expands at Slower Pace
• Euro: Unemployment Rate Hits 11-Year High
• US Dollar: ISM Manufacturing, Construction Spending on Tap
Euro Poised to Test Yearly High, British Pound to Hold Broad Range
The Euro rallied against the greenback for the second day to reach a high of 1.5084, and the single-currency looks poised to test the yearly high at 1.5146 as the economic docket reinforces an improved outlook for future growth. Manufacturing activity in the Euro-Zone expanded at a faster pace in November, with the index rising to 51.2 from 50.7 in the previous month, while the PMI reading for Germany increasing to 52.4 from 51.0 in October.
Moreover, the German economy unexpectedly added 7K jobs in November, which lowered the annual rate of unemployment to 8.1% from a revised reading of 8.2% in the previous month, while retail consumption increased 0.5% in October to top forecasts for a 0.4% rise. The breakdown of the report showed sales excluding cars rose at a nominal rate of 0.6% during the month, while discretionary spending on clothing and shoes jumped 8.5% after advancing 2.9% in September, and the conditions are likely to improve going into the following year as the expansion in monetary and fiscal policy works its way through the real economy. Meanwhile, the jobless rate in the euro-region held steady at an 11-year high of 9.8% for the second consecutive month in October follow the revision in the previous month’s reading, and expectations for higher unemployment may continue to drag on the outlook for future growth as policy makers see a risk for a protracted recovery.
The British Pound halted the three-day decline against the U.S. dollar and bounced back to reach a high of 1.6579 during the European trade however, the lack of momentum to cross back above the 20-Day SMA at 1.6628 could hold the GBP/USD within a narrow range over the remainder of the week as investors weigh the outlook for future policy. Meanwhile, the Nationwide house price index increased 0.5% for the second consecutive month in November, while the annualized rate increased 2.7% from the previous year versus forecasts for a 2.4% rise, and the data reinforces an improved outlook for the U.K. housing market as the government takes unprecedented steps to steer the economy out of recession. However, manufacturing activity in the U.K. unexpectedly expanded at a slower pace in November, with the PMI slipping to 51.8 from a revised reading of 53.4 in the previous month, and businesses may keep a lid on production going into the following year as policy makers hold a weakened outlook for private sector spending.
The greenback weakened against most of its major counterparts following the rise in risk appetite, and the reserve currency may face increased selling pressures going into the North American trade as equity futures foreshadow a higher open for the U.S. market. Nevertheless, manufacturing activity in the world’s largest economy is anticipated to expand at a slower pace in November as economists forecast the ISM index to weaken to 55.0 from 55.7 in the previous month, while construction spending is expected to contract 0.5% in October after advancing 0.8% in the previous month. At the same time, pending home sales are projected to fall 1.0% after surging 6.1% in the previous, and the data could spark increased selling pressures for the dollar as investors weigh the prospects for a sustainable recovery.
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