Market Analysis by Junaid Wilson
The dollar edged lower against major currencies on Monday on worries that heightened market volatility caused by an oil price slump and turmoil in credit markets could limit the number of U.S. interest rate hikes and dampen the dollars attraction.
In mid-morning trading, the dollar fell 0.2% against the yen at 120.76 yen and was down 0.2% against the Swiss franc at 0.9807 franc. The euro, on the other hand, rose 0.4% to 1.1028. The Australian dollar rose 0.9 percent to 0.7248, and the New Zealand dollar gained 0.8% to 0.6756. Against the Canadian dollar, the dollar was up 0.1% at 1.3742 after hitting 1.3677, its highest since June 2004.
The Euro-zone goods producing sector started the fourth quarter with a stronger than expected 0.6% monthly rise in output, its first increase since July. October’s gain followed an unrevised 0.3% in September from 1.3 percent to 1.9 percent.
October’s monthly advance came largely courtesy of the capital and durable consumer goods sub sectors where output climbed 1.4% and 1.8% respectively. Non-durable consumer goods were also up 0.4% energy advanced 0.6% but intermediates dipped 0.1%
Regionally there were monthly increases in all of the larger four member states with France and Italy both with 0.5% leading the way ahead of Spain 0.3% gain and Germany gain.
The latest data put October Eurozone industrial production 0.3% above its average level in the third quarter when it rose 0.2% versus April-June. The November PMI also pointed to a slight improvement in activity rates in mid-quarter so unless December disappoints (note, flash PMI figures are due Wednesday) goods production should contribute positively to real GDP growth this quarter.
Today we have CPI figures out of the UK and US we also have the ZEW survey out of France.