The U.S.
dollar traded mixed against the most major currencies. The U.S. dollar was
still supported by Friday’s nonfarm payrolls report. The U.S. economy added
217,000 in May, missing expectations for a 218,000 rise, after a 282,000 gain
in April. April’s figure was revised down from a 288,000 increase.
The U.S.
Labor Department released the Job Openings and Labor Turnover Survey or JOLTS today.
Job openings in the U.S. climbed by 289,000 to 4.46 million in April. That was
the highest figure since September 2007. Analysts had expected an increase to 4.04
million. The pace of firing also rose.
The euro slid
to 4-month lows against the U.S. dollar despite the strong industrial
production in France. Industrial production in France rose 0.3% in April,
meeting expectations, after a 0.4% decline in March. March’s figure was revised
up from a 0.7% decrease.
On a yearly
basis, industrial production in France was flat in April, after a 0.8% fall in
March.
The euro
suffers due to bond yield gap between some euro area government bonds and U.S.
Treasuries. While the currency in the Eurozone is to remain permanently cheap,
the first interest rate hike by the Fed in the United States and by the Bank of
England in the U.K. is more likely.
The
European Central Bank cut its interest rate to 0.15% from 0.25% last Thursday.
The ECB also cut its marginal lending to 0.40% from 0.75% and reduced its
deposit rate to -0.10% from 0.0%. The European Central Bank is the world’s
first major central bank to use a negative rate. The deposit rate of -0.10%
means that commercial bank will be charged for holding their reserves. This
measure should spur commercial banks to ramp up lending.
The British
pound traded lower against the U.S. dollar. Manufacturing output in the U.K.
increased 0.4% in April, meeting expectations, after 0.5% gain in March. On a
yearly basis, manufacturing production in the U.K. rose 4.4% in April,
exceeding expectations for a 4% increase, after a 3.3% increase in March.
Industrial
production in the U.K. climbed 0.4% in April, in line with forecasts, after a
0.1% decline in March. On a year-over-year basis, industrial production in the
U.K. rose 3.0% in April, after a 2.3% increase in March. That was the biggest
annual increase since 2011. Economists had expected a 2.7% gain.
The
National Institute of Economic and Social Research (NIESR) released their
monthly U.K. GDP estimates. They forecasted that GDP increased by 0.9% in the
three months ending in May after rise of 1.1% in the three months ending in
April 2014.
The Swiss
franc declined against the U.S. dollar. Switzerland’s unemployment rate
remained unchanged at 3.2% in May, as expected.
Retail
sales in Switzerland increased 0.4% in April, missing expectations for a 3.5%
gain, after a 3.4% rise in March. March’s figure was revised up from a 3.0%
increase.
The New
Zealand dollar traded higher against the U.S dollar in the absence of any major
economic reports. The kiwi was supported by expectations the Reserve Bank of
New Zealand will raise interest rates again this Wednesday.
The
increasing consumer price inflation in China supported the New Zealand and
Australian dollar. The Chinese consumer price index increased 2.5% in May,
after a 1.8% gain in April. Analysts had expected a 2.4% rise.
The Chinese
producer price index declined 1.4% in May, after a 2.0% decrease in April.
Analysts had expected a 1.5% fall.
The
Australian dollar traded higher against the U.S. dollar due to the
better-than-expected Australian business confidence data and the Chinese
consumer price inflation. The National Australia Bank released its business
confidence index for Australia. The index climbed to 7 in May, from 6 in April.
Job
advertisements in Australia fell 5.6% in May, after a 1.9% increase in April.
April’s figure was revised down from a 2.2% gain.
Home loans
in Australia were flat in April, after a 0.8% fall in March. March’s figure was
revised up from a 0.9% decline. Analysts had expected a 0.3% gain.
The
Japanese yen traded higher against the U.S. dollar ahead of the Bank of Japan
(BoJ) meeting this Friday. Investors speculate that the BoJ’s monetary policy
will support the Japanese currency.
Japan’s
preliminary machine tool orders decreased to 24.1% in May from 48.7% in April.
April’s figure was revised down from 48.8%.
Japanese
tertiary industry activity index dropped to -5.4% in April from 2.4% in March.
Analysts had expected the index to fall -3.3%.
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