Dollar Weaker against Kiwi, Australian Dollar and Yen

January 13, 2014

In an otherwise quiet Monday, the main development has been the strength of the yen and some other Pacific Rim currencies.

  • With Japan’s market shut in observance of Coming of Age Day, the yen strengthened 0.6% against the dollar.
  • The New Zealand and Australian dollars, both sensitive to commodity trends, also advanced 0.6% against their U.S. counterpart.
  • The Indian rupee firmed nearly a half percent.  Indian equities advanced 1.8% on lessening speculation of an interest rate high there following soft industrial production data.  The South Korean won also rose somewhat.
  • As a move to promote domestic metal smelting, the Indonesian government approved a ban on ore exports.  Nickel prices rose in response.

The dollar is unchanged against the euro and trading with a solid 1.36 handle.  The dollar firmed 0.2% against the loonie and sterling and 0.1% versus the Swiss franc but is 0.1% softer relative to the yuan.

Equities have risen 0.6% in Spain, 0.5% in Italy, 0.2% in Germany and 0.1% in France.  The Ftse is 0.1% softer, however.  Earlier in the day, stocks jumped 3.2% in Indonesia on the aforementioned ban on metal ore exports.  There were higher closes in New Zealand of 0.7%, South Korea and Malaysia of 0.5% each, and Taiwan of 0.4%.  Stocks fell by 0.5% in China where the central bank continues efforts to limit liquidity expansion.  Stocks also dropped 0.4% in Australia and 0.3% in Singapore.

Sovereign debt yields fell sharply last Friday after news of the small U.S. rise in jobs last month.  The yield on ten-year British gilts are down by a further two basis points today at 2.85%.  The auctions of Italian public-sector debt today were well received and fetched a record low of 1.51% on the 3-year portion.

WTI crude oil prices fell 0.7% to $92.06 per barrel.  Gold edged 0.1% lower to $1,245.70 per ounce.

Australian home loans in November repeated October’s increase of 1.1%.  Job ads in Australian fell by 0.7% last month.

Italian industrial production rose 0.3% in November, less than half as much as in October and less than analyst expectations.  Adjusted for variations in the number of working days, output posted an on-year advance of 1.4%.

The Irish construction purchasing managers survey for December reflected continuing robust expansion in that sector, although the index dipped a half point to 58.3.  Until August, the readings had been below the threshold of 50 that separates expansion from contraction.

Greek CPI inflation ended 2013 with a reading of negative 1.7%.  Portuguese consumer prices rose only 0.2% between December 2012 and December 2013.  Romanian consumer prices in the same span climbed 1.6%. 

The U.S. monthly federal budget figures will be reported today but no other economic data are scheduled for release.  The Bank of Canada publishes results of its fourth-quarter business outlook survey.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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