The US data remained robust with initial jobless claims increasing only slightly to 239,000 in the latest week from 234,000 previously which still indicated a strong labour market with layoffs remaining at low levels. There was a small decline in housing starts to an annual rate of 1.25mn from 1.28mn previously while permits rose to 1.29mn from 1.23mn.
There was also a strong reading for the February Philadelphia Fed manufacturing survey which increased to 43.3 from 23.6 and the highest reading for over 30 years, although the prices indices declined slightly on the month.
Fed Vice Chair Fischer backed Yellen’s stance on policy with expectations of further increase in rates and markets will continue to monitor comments in order to assess the potential for a rate hike at the March meeting. The dollar pushed higher immediately after the data, but was again unable to gain any traction and the Euro resisted any significant selling. Overall, the Euro rallied to the 1.0680 area as the dollar’s trade-weighted index declined by around 0.60%.
British Pound Reports that the UK may cut its interest rates before the USA cut their interest rates were the final straw this past week for Sterling. A slew of less than helpful inflation, employment and finally retail sales saw GBP weaker , but then the suggestion that with the background of that less than […]
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