Daily Afternoon Report 08/06/2015

Daily Afternoon Report 08/06/2015

 

The dollar pushed lower against a basket of other major currencies today, as investors continued to lock-in profits from the greenback’s recent rally following upbeat U.S. jobs data and as trading remained quiet with no major U.S. economic reports to be released throughout the session. The dollar strengthened broadly after the Labor Department reported on Friday that the U.S. economy added 280,000 jobs in May, ahead of economists forecast for 220,000. The unemployment rate ticked up to 5.5% from 5.4% in the previous month. April’s payroll report was revised to show that 221,000 jobs were created. Hourly earnings increased 0.3% in May, after a 0.2% increase in April. The upbeat data, particularly the pick-up in wage growth underlined the view that the economy is on track to rebound after a weak first quarter and bolstered expectations that the Federal Reserve could start to hike interest rates at its September policy meeting. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dropped 0.52% to 95.92, down from highs of 96.95 hit on Friday.

Elsewhere, official data earlier showed that German industrial production rose 0.9% in April, exceeding expectations for a 0.5% gain. The change in industrial production for March was revised to a 0.4% downtick from a previously estimated 0.5% fall. But investors remained cautious as European Commission President Jean-Claude Juncker urged Greek Prime Minister Alexis Tsipras over the weekend to come up with alternative economic reforms “swiftly” so that negotiations could continue this week. Athens delayed a key debt payment to the International Monetary Fund on Friday after Tsipras rejected the proposed reforms put forward by the EC as “absurd”.

Data also today showed that Japan’s gross domestic product was revised up to an annualized 3.9% in the first quarter from an initial estimate of 2.4% growth. Japan’s economy expanded by a revised 1.0% on a quarter-over-quarter basis, compared with a preliminary reading of 0.6%

Meanwhile, USD/CAD slipped 0.26% to 1.2407 after Statistics Canada said that building permits increased by 11.6% in April, beating expectations for a 3.4% gain. The change in building permits for March was revised to a 13.6% rise from a previously estimated 11.6% increase.

Another report also showed that housing starts rose by 201,700 units in May, compared to expectations for an increase of 185,000. April’s figure was revised to a 183,000 gain from a previously estimated 181,800 rise.

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