Daily Afternoon Report 20.07.2016

The dollar remained near four-month highs against the other major currencies on in subdued trade Wednesday, as global growth concerns continued to weigh on market sentiment and with no major U.S. data expected throughout the day.

Investors remained cautious after the International Monetary Fund on Tuesday downwardly revised its projection for global economic growth in 2016 to 3.1%, from the prior 3.2%, though expecting a rebound to 3.4% in 2017.

The IMF cut its U.K. growth forecast to 1.7% from the prior 1.9% for this year and slashing 2017 growth to 1.3% from April’s estimate of 2.2% due to the Brexit.

The pound found support however after the U.K. Office for National Statistics said on Wednesday that the unemployment rate fell to 4.9% in the three months to May from April’s reading of 5.0%, compared to expectations for an unchanged reading.

The claimant count rose by 400 in June, compared to expectations for a increase of 3,500 people, and following an advance of 12,200 a month earlier.

Meanwhile, the average earnings index, including bonuses, rose by 2.3% in the three months to May, in line with forecasts and after increasing by 2.0% in the three months to April.

Excluding bonuses, wages rose by 2.2%, below forecasts for a 2.3% increase and following a 2.2% increase in the three months to April.

The yen remained under pressure amid mounting expectations for additional monetary easing by the Bank of Japan in the near future.

The U.S dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.08% at 97.14, just below a four-month peak of 97.37 hit overnight.