Tag Archives: U.S economy

Flying money

Dollar Rises on Anticipation of FOMC Minutes Release

The Fed is playing a central role again this week in the global currency exchange as traders await the release of the minutes of the December FOMC minutes to gauge how the Fed really stands towards the $10-billion stimulus reduction it decided to implement.

The anticipation alone of the release and speculation as to the content of the minutes has sent the U.S. dollar climbing near a five-year five against the Japanese yen. Economists and traders expect that the stimulus reduction will continue a steady course over the next year with gradual decreases after each new FOMC meeting. According to San Fransisco Fed President John Williams, who is not currently a voting member of the committee, they bond-purchasing programme may well end this year.

A forecast by Bloomberg News survey, sees the Fed cutting the stimulus package by $10 billion dollars after each one of the next seven FOMC meetings, thus ending the programme by December 2014.

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Canadian Dollar

U.S. Economic Growth Pulls Canadian Dollar Out of Slump

The U.S., Canada’s largest trading partner, experienced a the second greatest boost in its manufacturing industry in over two years last December that drove the Canadian dollar against most of its peers.

The loonie fell against the greenback after momentarily rising with American claims for unemployment benefits falling to their lowest in a month. Increased exports will determine the strength of economic growth, according to the Governor of the Bank of Canada, Stephen Poloz. Canada’s biggest exporting commodity, crude oil, drop to the lowest level in a month.

Economic analysts are looking to the U.S. economy for clues on the improvement of the Canadian dollar on the expectation that Canada can get a lift on an outperforming American economy. In 2013 the Canadian dollar lost an overall 6.6 percent, experiencing its biggest decline in five years.

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Gold & Silver

Silver and Gold Lose Trading Steam

Precious metals have been pushed down in the markets again on the prospect that the Federal Reserve will reduce economic stimulus as more reports indicate growth in the U.S. economy, with both gold and silver hitting their lowest points since the summer.

The Bloomberg U.S. Dollar Index, which measure the currency’s strength against 10 of its major peers, remained near its 11-week high since yesterday, with U.S. manufacturing picking up most speed in two years. The NFP report is expected to show an increase of 181,000 for last month.

The stronger U.S. economy has lessened investors’ faith in the store value of the precious metal which might see its first annual drop in 13 years. The minutes form the last Fed meeting were released on 20th November revealing that policy makers expected an improvement in the economy “in coming months” which has investors anticipating an early tapering of the stimulus. The next meeting will take place on 17th-18th December.

Gold for immediate delivery dropped 0.7 percent. Prices reached $1,212.47, the lowest since July 5. Bullion for delivery in February dropped 0.5 percent on the Comex in New York.

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euro vs. dollar

Dollar Rising Against Euro Sign of Recovery?

The U.S. dollar kept rising for the fourth day against the euro before the release of U.S. Unemployment Claims, which is forecast to have decreased, today at 1:30 p.m. GMT.

The U.S. currency, however, is still set for monthly declines against most major peers as the Federal Reserve decision to continue its $85-billion bond-buying programme released yesterday underlines the toll the partial government shutdown earlier this month took on the economy.

The dollar inched up 0.2 percent to $1.3709 yesterday, after having gained 0.5 percent in the previous three sessions. Overall for the month, the greenback was set for a 1.3 percent fall against the euro.

Whether the signs of recovery can hold up in these turbulent times will be revealed in the first-time applications for jobless benefits which is expected to have decreased to 341,000 in the week ended 26th October from 350,000 the week before.

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