Dollar Boosted By Upbeat U.S. Data and Other Top Forex News.
The dollar was in mostly positive territory again the other major currencies on Thursday, following the release of positive housing and manufacturing data in the U.S.
Sales of existing home increased 1.3% in April to an annual rate of 4.65 million units according to data from the National Association of Realtors.
While this was slightly below analysts estimates of home sales to rise 2.2% to 4.68 million last month, the increase indicated that the housing market is regaining momentum.
In a separate report, U.S. manufacturing activity expanded at a faster rate than expected this month. Markit said that its preliminary U.S. manufacturing index rose to 56.2 from a final reading of 55.4 in April, and ahead of expectations of 55.5.
The data came after the Labor Department reported that the number of people filing for initial jobless benefits last week increased by 28,000 to 326,000 from the previous week’s revised total of 298,000. Analysts had expected jobless claims to rise by 12,000 to 310,000.
Despite the weekly increase, traders continue to see slow, but steady, improvement in the labor market, which supports the view of gradually improving underlying growth momentum.
This mornings data came after the release of the preliminary reading of China’s HSBC manufacturing index, which rose to a five month high of 49.7 this month, up from a final reading 49.4 in April, but still remained below the 50 level separating contraction from expansion.
The mostly upbeat U.S. and Chinese data caused the dollar to strengthen against the yen during the U.S. session, with USD/JPY closing the session up 0.41% at 101.81.
There was also positive news out of the eurozone this morning, after data showed that the region’s service sector expanding at the fastest rate in almost three years. With Germany’s private sector continuing to grow strongly this month but the French private sector fell back into contraction territory.
However, the news was tempered by the release of somewhat disappointing manufacturing data. Which showed that manufacturing activity in the eurozone expanded at the slowest rate in six months.
EUR/USD slipped -0.25% closing the session at 1.3652.
The pound was also lower on Thursday after official data showed that the U.K. economy grew 0.8% in the first three months of the year, disappointing some market expectations for an upward revision.
GBP/USD closed the session down -0.22% at 1.6864.
Elsewhere, the Australian dollar fell after the release of this mornings U.S. manufacturing data. The Aussie had gained overnight following strong Chinese manufacturing data.
AUD/USD closed the session down -0.38% at 0.9216.
The New Zealand dollar was also trading lower, following this mornings upbeat U.S. data.
NZD/USD closed the session down -0.17% at 0.8560.
Finally, the Canadian dollar was lower Thursday amid a worse than expected showing in retail sales during March.
USD/CAD closed the session down -0.17% at 1.0895.
More coverage of today’s session.
- FT: Macroprudential measures’ impact on sterling. – With UK policy makers flagging concerns over the rising risks of a bubble in the housing market, Delphine Strauss, currencies correspondent, asks David Bloom, currency strategist at HSBC, how macroprudential measures would affect sterling. Also, what would be the knock-on effects of ECB easing for other currencies – and what does range-bound trading in the yen tell us about the state of the forex market?
- WSJ: Chinese manufacturing data point to stabilization, but concerns remain. – A pickup in China’s exports and factory orders is likely to reduce pressure on the government for broad-based stimulus to boost an overall slowing Chinese economy, economists say.
More Top Stories:
Dean Popplewell: Carney’s patience outperforms rate-hike expectations. – With Britain’s economy booming the expectations for when the Bank of England (BoE) will raise interest rates has hit a fever pitch. It seems it’s all analysts, economists, and investors are talking about of late, yet lost in the din is the BoE governor’s consistent insistence that no move will be made in short order.
FT: EM currencies benefit as investors return. – A year after Ben Bernanke’s first mention of tapering triggered a panic in emerging markets, a rush back into higher-yielding assets is allowing central banks to scale back measures put in place to support their currencies in the worst of the sell-off.
680News: Canadian dollar moves lower as March retail sales miss expectations. – The Canadian dollar was lower Thursday amid a worse than expected showing in retail sales during March.
WSJ: New Zealand dollar higher late after China data. – New Zealand–The New Zealand dollar was trading higher late Thursday after getting a lift from the initial HSBC manufacturing purchasing managers index in China.
SMH: Australian dollar jumps on China PMI. – The Australian dollar strengthened from US92.22¢ to US92.67¢ after the HSBC Flash China Manufacturing PMI was reported stronger than expected, jumping to a five-month high at 49.7 in May against the consensus forecast of 48.4. The April reading was 48.1.
Investing.com: Gold gains on Fed minutes, Ukraine concerns. – Gold prices rose in early afternoon U.S. trading on Thursday after the minutes of the Federal Reserve’s April policy meeting revealed that rate hikes remain far off on the horizon, while ongoing tensions in Ukraine bolstered the yellow metal’s safe-haven appeal.