Published: 28 Mar at 3 PM Tags: Euro, Dollar, America, Eurozone, Canadian Dollar, Cyprus, Australia, USA, Canada, Germany, Italy,
After weeks of positive data releases for the US, today’s worse than anticipated results came as something of a surprise.
Firstly, in the week ending March 23rd first time jobless claims advanced to 357,000 – a 16,000 increase which was significantly more than economists expected.
The current level is now the highest for over a month.
The less volatile four-week moving average also rose, edging away from a five-year low.
Meanwhile, the MNI Chicago Report business barometer dropped to 56.5 in March, signalling a slower expansion in US business activity. Last month’s reading of 56.8 was the highest recorded for almost 12 months.
Final US GDP figures for the fourth quarter were also released today. In the third quarter the US economy grew at a 3.1 per cent pace, but in the fourth quarter it expanded at an annual rate of just 0.4 per cent. Although the final result was higher than the initial estimate of 0.1 per cent it was lower than the 0.5 per cent economists anticipated.
The most notable slump in military spending for 30 years was largely responsible for the slowdown.
Following the news the US Dollar experienced little movement. The week has been largely risk-off, and with European, American and Australian markets closed for the Easter break it seems investors are still erring on the side of caution, even though the situation in Cyprus hasn’t escalated as feared.
The ‘Greenback’ did dip slightly against the Euro. Earlier today the common currency was slightly boosted by an unexpected increase in German retail sales, but the Euro remained under pressure as concerns regarding the Cyprus crisis and Italian political uncertainty continued to take a toll, keeping investors clinging to safe-haven assets.
Meanwhile, over in Canada
the news was more positive. Data revealed that the nation’s economy expanded by 0.1 per cent more than predicted, while Canadian output increased by 0.2 per cent following December’s 0.2 per cent slump.
Immediately after the North American data was released the Canadian Dollar gained on its US counterpart, but quickly fell back to trade in region of C$1.0162.
As one industry expert remarked: ‘We got a little uptick in the currency, but now we’re back to where we were before the numbers, so a muted reaction at best. We had a couple upside surprises this week on the Canadian data, so a mild positive for the currency, but it’s only two data points and sort of backward looking ones. We’ll have to see some more data points in the weeks ahead to see if we’re having a real uptick on the Canadian front.’
As of Thursday, 28th March 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1859, GBP USD exchange rate was 1.5197, GBP CAD exchange rate was 1.544, and GBP AUD exchange rate was 1.4588.