DOLLAR INDEX EXTENDS GAINS, HITS 2 WEEK HIGH
On Thursday, the Dollar rose up to two week highs compared to other key currencies in the face of the publications of generally negative U.S statistics due to the worries over an impending British departure from the European Union, Brexit which presently controls a lot of emotions.
According to the U.S department of Labour, the number of persons holding the first jobless aids in the week ending June 11 rose by 13,000 to 277,000 from the last week’s sum of 264,000. Meanwhile Experts predict jobless claims to increase by 6,000 to 270,000 in the previous week.
On the other hand, the U.S Department of Commerce stated that consumer prices increased by 0.2% in May against the projections of 0.3% profits. Also, year-over-year, consumer prices increased by 1.0% last month lower than the projected 1.1% profits. However, the Core CPI with exception of food and energy costs, moved by 0.2% as projected in May.
Positively speaking, the Federal Reserve Bank of Philadelphia stated that its manufacturing index increased to 4.7 in the current month against May record of -1.8 defeating the projected 1.1 increase.
Following the vote by officials of the Bank of Japan to carry on with an expanse in the monetary base at a yearly rate of about Y80 billion, the USD/JPY recorded a downslide of 22.05% at 103.81, its lowest level since August 2014.
Also on Thursday, the BoJ at the end of the monetary policy meeting identified the EU polls on June 23 as a major geopolitical risk to the Japanese economy together with the “European debt issue”. The conclusion came after the Fed too referred to the polls as a determinant in its resolution on Wednesday to retain interest rates on hold.
Already, the dollar compared to other major currencies had debilitated as a result of the Fed decision to keep rates on hold which also dropped the predictions for how much they are supposed to increase interest rates in the coming years.
EUR/USD dropped at 1.07% to a two-and-half week low of 1.1140.
Meanwhile, the dollar increased compared to the Pounds and the Swiss Franc, with GBP/USD down 1.16% at 1.4045 and with USD/CHF rising at 0.70% to 0.9681. The pound recorded a downslide after the Bank of England retained its monetary policy as a result of the predictions and restated that the likelihood of a Brexit was the biggest immediate threat confronting U.K financial markets and most likely the global financial markets.
The Swiss National Bank also retained its standard interest rate on Thursday at a record-low 0.75% and stated that there is possibility of adopting strategies that will make the Franc fall.
The Australian and New Zealand dollars declined with AUD/USD down 1.40% at 0.7304 and with NZD/USD decreasing 0.73% to 0.6982.
The Australian Bureau of Statistics earlier on Thursday stated that the number of jobless people in May increased by 17,900, defeating predictions for an upturn of 15,000 although the joblessness rate retained its 5.7% in the previous month.
For New Zealand, approved statistics revealed that gross domestic products increased by 0.7% in the first quarter, surpassing the predictions for an upturn of 0.5%. Each year, the GDP increased by 2.8% in the first quarter.
Away from that, the USD/CAD soared 1.14% to trade at two-week high of 1.3059.
Thus, the U.S dollar index that measures the greenback’s strength against a trade-weighted basket of six major currencies rose to 0.81% to 95.44 the highest since June 3rd.