Daily Morning Report 14.08.2015

Daily Morning Report 14.08.2015

The New Zealand dollar fell in early Asuia on Friday on disappointing retail sales data with investors expecting calmer markets as the week ends and the impact of China’s devaluation ripples. Retail sales in New Zealand rose 0.1% in the second quarter, well below the 0.7% gain seen, though overall year-on-year gained 5.9%, above the 5.2% pace seen. NZD/USD traded at 0.6556, down 0.21%, while AUD/USD changed hands at 0.7375, up 0.20% and USD/JPY was quoted at 124.37, down 0.06%. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.04% at 96.40. Overnight, the dollar held gains against the other major currencies on Thursday, as upbeat U.S. economic reports sparked optimism over the strength of the economy and fuelled further expectations for a September rate hike by the Federal Reserve. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 8 rose by 5,000 to 274,000 from the previous week’s total of 269,000. Analysts had expected initial jobless claims to rise by 1,000 to 270,000 last week. Separately, the U.S. Commerce Department said that retail sales increased by 0.6% last month, beating expectations for a gain of 0.5%. Retail sales fell by 0.3% in June. Core retail sales, which exclude automobile sales, rose by 0.4% in July, matching forecasts. Meanwhile, the turmoil caused by the devaluation of the yuan two days in a row subsided after China’s central bank said there was no basis for further depreciation in the currency, given China’s strong economic fundamentals. The yuan has fallen almost 5% against the dollar this week after China devalued its currency in a surprise move on Tuesday in a bid to shore up growth in the flagging economy. The Melbourne Institute earlier reported that its inflation expectations for the next 12 months in Australia ticked up to 3.7% in July from 3.4% the previous month.