US Dollar Stable As Major Currencies Consolidate Losses
- US personal spending increased by 0.5% in August 2014, compared to the last time decline of 0.1%.
- US Core Personal Consumption Expenditure price index rose by 1.5% (YoY) in August 2014.
- German consumer price index in September is expected to remain flat at 0%, according to a preliminary report.
- Euro zone consumer confidence dropped from -10 to -11 in September 2014.
- EURUSD as mentioned earlier is trying to recover ground from the 1.2650 support area, but faces a lot of hurdles on the way up.
US Personal Spending
The US personal spending was released at the start of the NY session by the Bureau of Economic Analysis, Department of Commerce. The forecast was slated for a 0.4% increase in August 2014, compared to the last time decline of 0.1%. However, the end result was somehow better than expected, as the US personal spending jumped up by 0.5%. Moreover, the report mentioned that the US personal income increased by 0.3% or $47.3 billion. This was 0.1% higher than the last time. The outcome was certainly positive for the US dollar. The USDJPY pair reacted to the upside, and traded around 10 pips higher after the release.
The US Core Personal Consumption Expenditure price index was also released at the same time by the US Bureau of Economic Analysis. Some analysts were expecting it to remain flat in August 2014 i.e. 0%, compared to the previous rise of 0.1%. When we consider the yearly change, then the US Core Personal Consumption Expenditure price index increased by 1.5%. The report added that the Private wages and salaries rose by $30.4 billion in August 204, which is higher than $17.4 billion in July.
Euro Zone Consumer Confidence
There were a couple of important releases lined up during the London session today, including the Euro zone consumer confidence, business climate and German consumer price index. The Euro zone consumer confidence was released first by the European Commission. The forecast was already slated for a 1 point decline from -10 to -11. The outcome was as expected. Moreover, the Euro zone economic sentiment was also released. The report mentioned that the economic sentiment in both Euro area and EU dropped in September. The Euro area economic sentiment fell by 0.7 points, and currently stands at 99.9, and EU economic sentiment fell by 1 point to 103.6. So, overall the outcome was disappointing. The Euro didn’t react much after the data.
The main release of the London session was the German consumer price index, which somehow lifted the Euro in the short term. The market was expecting the German CPI to decline by 0.1% in September 2014. However, the preliminary reading suggests that the CPI will remain at 0%. This was somehow positive for the EURUSD pair, which pushed the pair towards the 1.2700 level as expected.
There is a resistance around the 1.2720-40 area for the EURUSD pair, which might ignite one more leg lower in the pair.
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UK Nationwide Housing Prices highlighting the value of the houses prices in UK and indicate current movements in the housing market posted an increase of 1% in April, compared to the preceding month.
US dollar continued to weaken against a few currencies and managed to recover some ground against currencies like the Euro and the British Pound
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