Daily Afternoon Report 27/11/2015
The dollar remained at an eight-month peak against the other major currencies today, as trading volumes are expected to remain thin for the long Thanksgiving weekend and as hopes for an upcoming U.S. rate hike continued to support. The US Dollar remained broadly supported after a string of upbeat U.S. data released over the week added to expectations that the Federal Reserve will raise interest rates next month. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.32% at 100.18 just below Wednesday’s eight-month peak of 100.21.
However, the euro’s gains were held in check since European Central Bank President Mario Draghi signaled last week that the bank is ready to act quickly to boost inflation in the eurozone and can also change the level of its deposit rate to boost the impact of quantitative easing.
Elsewhere, in Japan, data today showed that household spending fell 0.7% in October, compared to expectations for an increase of 1.1% and after a 1.3% drop the previous month. A separate report showed that Tokyo’s consumer price index rose by an annual rate of 0.2% in November, in line with expectations. Core CPI, which excludes fresh food, in Tokyo was flat this month, compared to expectations for a 0.1% downtick.
Also, the U.K. Office for National Statistics reported today that gross domestic product rose 0.5% in the third quarter, in line with expectations and with a previous estimate. Year-on-year, U.K. GDP expanded 2.3% in the three months to September, as expected and in line with an initial estimate.