Daily Afternoon Report 16.06.2016

The dollar deleted losses against the other major currencies today, re-approaching a two-week high despite the release of mostly downbeat U.S. economic reports as the greenback recovered from the Federal Reserve’s latest policy statement.

The U.S. Department of Labour said that the number of individuals filing for initial jobless benefits in the week ending June 11 rose from 13,000 to 277,000 from the previous week’s total of 264,000. Analysts expected jobless claims to rise by 6,000 to 270,000 last week.

Separately, the U.S. Commerce Department said consumer prices increased 0.2% in May, compared to expectations for a 0.3% gain. Year-over- year, consumer prices were 1.0% higher last month, below expectations for a 1.1% gain.

Core CPI, which excludes food and energy costs, increased as expected in May by 0.2%.

On a more positive note, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 4.7 this month from -1.8 in May, beating expectations for a rise to 1.1.

In conclusion of its monetary policy meeting today, the BoJ also flagged the EU referendum on June 23 as a key geopolitical threat to the Japanese economy, along with the “European debt problem”.

The decision came after the Fed also cited the referendum as a factor in its decision on yesterday to keep interest rates on hold.

The dollar had already weakened against the other major currencies when the Fed kept rates unchanged and lowered forecasts for how much they expect to hike interest rates in the next few years.

The pound weakened after the Bank of England left its monetary policy unchanged, in line with expectations, and repeated that the possibility of a Brexit was “the largest immediate risk facing U.K. financial markets, and possibly also global financial markets.”

Also today, the Swiss National Bank left its reference interest rate unchanged at a record-low -0.75% and repeated that it is still prepared to take further action to weaken the franc.

Previously today, the Australian Bureau of Statistics said that the number of employed people rose by 17,900 in May, beating expectations for an increase of 15,000, while the unemployment rate remained unchanged at 5.7% last month.

In New Zealand, official data showed that gross domestic product rose 0.7% in the first quarter, undue expectations for an increase of 0.5%. Year-on-year, GDP  rose by 2.8% in the last quarter.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.46% at a nearly two-week high of 95.06.