The US dollar weakened, as investors continued to revise their forecasts on the timing of a rate hike by the Federal Reserve System of the USA on the day following the publication of minutes of the July meeting of the central bank.
Investors sold the dollar, ignoring the strong data on applications for unemployment benefits, sales of existing homes and the Philadelphia Fed index, focusing on the signals from the central bank. Minutes of the last meeting of the US Federal Reserve signaled that reducing the likelihood of policy tightening in September. Rising interest rates in the United States will make the dollar more attractive to investors.
Wednesday's reports of last month's meeting of the Operations Committee on the Federal Open Market testified that, according to the expectations of the leaders of the central bank, inflation in the US will be below the target level of 2% to the end of 2017 and then will rise only gradually. Further declines in crude oil prices continue to put pressure on energy prices, the head of the Fed.
The next meeting of the Operations Committee on the Federal Open Market will be held on September 16-17.
Investors have also revised their forecasts on the timing of the Fed raising interest rates after last week, China devalued its currency, to make a revolution in the financial markets and causing a blow to more risky assets, including emerging market currencies and commodity currencies. China's decision also raised the concern about the slowing economy of the country and weakening global inflation. It also lowered the likelihood of tighter monetary policy in the United States against the backdrop of deteriorating global economic outlook.
US Department of Labor said the number of Americans who first applied for unemployment benefits, increased slightly last week but remained at historically low levels, indicating a stable situation on the labor market. According to the report, in the week ended Aug. 15, the number of initial applications for unemployment benefits rose by 4,000 to a seasonally adjusted and reached 277 000. Economists had expected 272,000 new claims. The figure for the previous week was revised up to 273 000 to 274 000. It is worth emphasizing the number of calls remained below the psychological threshold of 300,000 already the 24th week in a row, but the figure is growing fourth. week in a row.
Sales in the secondary market increased significantly by the end of July, reaching the highest levels since the start of the recession, helped by a confident boost in single-family housing sector. It became known from the report of the National Association of Realtors. The data showed that the seasonally adjusted existing home sales rose 2% to $ 5.59 million at the same time. Units. which is the highest value since February 2007. Also add that the volume of sales in June was revised down - to 5.48 million. Units from 5.49 million. Units. Economists had expected sales to fall to 5.44 million. Units. In annual terms, sales in the secondary market increased by 10.3 percent.
As shown by the report, the Philadelphia Fed, in August PMI improved markedly, reaching thus the level of 8.3 points compared with 5.7 points in July. It is worth noting that many economists expect this figure to increase to the level of 7 points.
The pound fell sharply earlier against the dollar, approaching to $ 1.5600, which was due to the publication of data on retail sales in Britain, which were worse than expected. However, a strong balance report factory orders helped the British currency to play more than half of the previously lost positions. As previously reported, last month's retail sales in Britain rose slightly, being thus below experts' forecasts, hit by falling sales of motor fuel. According to the data, retail sales rose in July by 0.1 percent compared to the previous month, and increased by 4.2 percent in annual terms. Economists had expected sales to rise 0.4 percent for the month and 4.4 percent per annum. Also add that the figures for June were revised to improve - monthly change was revised down to -0.1 percent from -0.2 percent, while the annual rate to 4.2 percent from 4.0 percent. Meanwhile, the report stated that, excluding fuel sales rose 0.4 percent for the month and 4.3 percent compared to the previous year, in line with expectations. The ONS said that the 2.6 percent drop in sales of motor fuel was partially offset by a 3.6-percent increase in sales of products for the home. Sales of household electrical appliances and furniture increased significantly in the past month, which probably reflects the improvement in the housing market.