What’s Happening With Currencies – September 15, 2011
It’s an exciting day to be in the currency markets. With the European financial crisis still looming over the euro, global central banks from Japan, US , UK and Europe announced a coordinated effort to provide European banks with much needed liquidity. This has pushed equities higher in both the US and Europe, as well as crude oil contracts. Gold, on the other hand, is trading lower – breaking through support at $1,800 a troy ounce.
1. In a coordinated effort, the BOJ, BOE, ECB, SNB and the Federal Reserve will provide additional US dollar liquidity to European lenders. The operations would last till the end of the year and help to support a euro positive environment. The single currency traded towards a four-day high on the announcement.
2. US initial jobless claims rose more than anticipated for the week. US Labor Department figures showed an increase to 428,000 claims – above the 4-week moving average of 419,500.
3. Swiss industrial production gained better than expected in the second quarter. For the second three months of the year, output rose by 3.6%, higher than the estimates of a 3% gain. The report reverses a 9.6% drop in the previous quarter.
4. UK retail sales worsened a bit in August, declining by 0.1% compared to estimates of a worse 0.2% decline. Although the figure beat estimates, the monthly report still falls short of the 0.2% gain last month.
5. Empire State manufacturing activity fell in the September, making it the fourth consecutive monthly decline in the report. For the month, activity fell to a reading of -8.8, building on last month’s -7.7 reading.
6. Output activity also fell in Philadelphia – rebounding a bit from last month’s -30.7 plunge. September readings for sector activity in Philadelphia dropped to a -17.5 reading.
7. US consumer prices rose more than anticipated in August, increasing by 0.4% – against expectations of a 0.2% increase. Core readings were a bit more paced, rising by 0.2%.