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Janet Yellen off to good start

Currencies Direct November 15th 2013 - < 1 minute read

Markets were buoyed by Janet Yellen yesterday as Federal Reserve
chair nominee supported the defence of the FED’s radical
quantitative easing to the US senate “We have made good progress,
but we have farther to go to regain the ground lost in the crisis
and the recession” she told senators. Yellen also managed to get
through two hours of questioning without triggering any big moves
in the financial markets and showed her commitment to promoting a
stronger recovery and made it clear that she does not support an
early withdrawal of stimulus. Yesterday’s US economic reports had
very little impact on the dollar. Jobless claims dropped to 339k
while trade deficit rose to -$41.8B in the month of September.
Despite the improvements in the ISM manufacturing index, exports
dropped for the third consecutive month, reflecting the weakness in
global demand.

Yesterday, UK retail sales report fell by 0.7 per cent in the
month of October. Consumers spent less on key items such as
household appliances, clothing and gas. The surprise decline in
demand was attributed to warmer weather but also to slow wage
growth and consumer confidence. Despite this weaker data, Sterling
was unfazed. Compared to the Eurozone, the UK economic outlook is
brighter. According to the latest economic reports, growth in the
Eurozone slowed to 0.1 per cent in the third quarter, down from 0.3
per cent in Q2. This seems to explain why the European Central Bank
cut interest rates earlier this month. Germany and France faltered
with weaker growth but improvements were seen in Italy and Spain.
Today, we have Eurozone consumer price report in focus which is
expected to confirm that price pressures declined in October.

 

Written by
Currencies Direct

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