On Wednesday, the U.S. dollar index has continued to grow due to the good U.S. macroeconomic data. Increase in producer prices was (+0.4%) for December exceeded forecasts and was maximum six months. Most economists believe that this will boost the income of American corporations and will not cause an inflation increase. Wholesale prices for 12 months increased only by 1.2%. "Beige The "Beige Book" U.S. economy overview also turned out proved positive.
Today we expect more important statistics from the U.S. strining out at 13-30 GMT (0) - inflation for December. In our opinion, the preliminary forecasts are negative for the economy. However, in this case "the worse the better." principle may work out. Probably the inflation increase may make the Fed minimize quantitative easing (QE3) more actively. This, will help the U.S. dollar strengthening. Note that the forecasts of other macroeconomic data - unemployment for the week and the index of business activity in Philadelphia are positive for the dollar. Today they come out at 13-30 GMT (0) and 15-00 GMT (0), respectively. In addition, the important economic data is expected in the Eurozone. At 10-00 GMT (0) we will find out about inflation in December. The preliminary forecasts, in our opinion, are neutral. Meanwhile, Forex market participants reduced their activity anticipating economic data .
The Australian dollar weakened (AUDUSD), Japanese Yen (USDJPY) and British pound (GBPUSD) got weaker due to the U.S. dollar strengthening. We wrote more about this in our yesterday's review. There is now more information. The Australian dollar has fallen by more than 1% and updated at least three years minimum after the negative labor market data release. The number of jobs decreased, while the growth was expected. Unemployment in Australia remained at its four-year shigh at 5.8%.
The Bank of Japan Chairman, Haruhiko Kuroda said today that the Japanese government bond redemption will continue till the annual inflation level reaches 2%. This should have a significant positive impact on the economy. Recall that the amount of the monthly purchasing is more than $ 7 trillion yen ($ 66.7 billion ). Today, the Bank of Japan bought Japanese government bonds in amount of 700 billion yen. The program is carried out by printing money. Tomorrow we expect the consumer confidence in Japan for December at 5-00 GMT (0). The preliminary forecast is slightly positive for the yen (it may drop slightly on the chart).
The UK real estate price index was the highest for the past 14 years. Within just 12 months, the price of houses increased by 5.4 %, in London - by 11.6%. The Bank of England Governor, Mark Carney made a number of positive statements about the state of the British economy yesterday. This caused a sagnificant weakening of the British pound. Forex market participants fear that, due to relative stability in the country, the Bank of England stands ready to take any step to prevent the formation of a "bubble" in the real estate market. Note that according to Mark Carney, a lower pound could support the British economy. Some investors believe that under the circumstances, the pound is able to fall around 1.6
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