Clearer signs of an U.S. economic recovery are emerging and Dollar strength is gradually gaining momentum.
According to minutes of the most recent Federal Reserve meeting, several policy makers on the Federal Open Market Committee had advocated varying the pace of bond purchases.
The Fed has been implementing what is a third round of so-called quantitative easing (QE), which tends to debase the Dollar. the U.S. central bank has been purchasing around $85 billion of government and mortgage securities a month in order to support growth.
According to minutes of the most recent Federal Reserve meeting, several policy makers on the Federal Open Market Committee had advocated varying the pace of bond purchases.
The Fed has been implementing what is a third round of so-called quantitative easing (QE), which tends to debase the Dollar. the U.S. central bank has been purchasing around $85 billion of government and mortgage securities a month in order to support growth.
I expect that the Fed could reduce asset purchases in the second part of 2013 as the U.S. economy enters a gradual recovery path.
The Dollar Index, which Intercontinental Exchange Inc. uses to track the Dollar against currencies of six U.S. trading partners, had earlier today gained 0.1% to 81.131 after touching 81.147, which was the highest level in three months.
Economists expect that the Conference Board's index of U.S. leading indicators has likely also risen by 0.2% in January for a second month. The gauge consists of data which includes work hours of manufacturers and initial jobless claims.
As for the Euro, the currency has remained lower versus the Dollar as economists predict that data will show that the manufacturing and services industries have shrunk in the Euro bloc during February.
The manufacturing purchasing manager's index is anticipated to be 48.5, as compared with 47.9 in January. Any reading below 50 shows contraction.
I expect that Euro weakness will be highlighted as the U.S. economy picks up and Dollar strength improves. It appears to me that although the debt crisis in the Euro block is waning, the Euro's recovery still lags as compared to other region's recoveries.
Earlier today the Euro dropped by 0.2% to $1.3259 and by 0.4% to 123.85 Yen. The Yen rose by 0.2% to 93.42 per Dollar.
The Yen has for some time been under pressure amid speculation that the next Bank of Japan (BOJ) governor will boost reserves in an effort to end deflation.
It's apparent to me that the BOJ seems set to continue its policy to expand monetary easing whoever is appointed as the next governor, and with that being the case I foresee a weaker Yen over the next 12 months.
The Dollar Index, which Intercontinental Exchange Inc. uses to track the Dollar against currencies of six U.S. trading partners, had earlier today gained 0.1% to 81.131 after touching 81.147, which was the highest level in three months.
Economists expect that the Conference Board's index of U.S. leading indicators has likely also risen by 0.2% in January for a second month. The gauge consists of data which includes work hours of manufacturers and initial jobless claims.
As for the Euro, the currency has remained lower versus the Dollar as economists predict that data will show that the manufacturing and services industries have shrunk in the Euro bloc during February.
The manufacturing purchasing manager's index is anticipated to be 48.5, as compared with 47.9 in January. Any reading below 50 shows contraction.
I expect that Euro weakness will be highlighted as the U.S. economy picks up and Dollar strength improves. It appears to me that although the debt crisis in the Euro block is waning, the Euro's recovery still lags as compared to other region's recoveries.
Earlier today the Euro dropped by 0.2% to $1.3259 and by 0.4% to 123.85 Yen. The Yen rose by 0.2% to 93.42 per Dollar.
The Yen has for some time been under pressure amid speculation that the next Bank of Japan (BOJ) governor will boost reserves in an effort to end deflation.
It's apparent to me that the BOJ seems set to continue its policy to expand monetary easing whoever is appointed as the next governor, and with that being the case I foresee a weaker Yen over the next 12 months.
Posts
No comments:
Post a Comment