USD turned higher last week against major world currencies after falling for three consecutive weeks as market participants lost confidence in prospects for a U.S. fiscal spending boost under President Donald Trump after his failure to pass a major healthcare reform bill. President Trump’s inability to deliver on his campaign promise to repeal and replace Obamacare marked a big setback for a Republican president whose own party controls Congress and raised doubts over whether he will be able to deliver on other promises made during the election.
USD started to recover after several Fed officials turned bullish on Fed rate hike plans this year. USD further received support after mid-week selling seen in the Euro and the release of encouraging U.S. economic data reviving the optimism over the strength of the U.S. economy. USD Index (DXY), which tracks the movement of the USD against six major currencies, rose by 0.87% on a week on week basis and is at a level of 100.49.
Chicago Fed President Charles Evans and Dallas Federal Reserve Bank President Robert Kaplan on Monday said that the U.S. central bank would continue its monetary tightening cycle. Federal Reserve Vice Chairman Stanley Fischer said on Tuesday that two more rate hikes this year seemed “about right.” Federal Reserve Bank of Boston President Eric Rosengren said that the U.S. central bank should be prepared to raise interest rates a total of four times in 2017 to prevent the U.S. economy from overheating.
U.S. Consumer Board reported that its consumer confidence index rose to a nearly 17-year high of 125.6 in the month of March from 116.1 in the previous month and against the expectation of a reading of 114.
U.S. National Association of Realtors reported that its pending home sales increased by 5.5% last month, more than doubling expectations for an increase of 2.4%.
Data reported on Thursday showed that the third estimate of fourth quarter U.S. gross domestic product was at 2.1%, up from the previous reading of a 1.9% expansion against the expectation of a growth rate of 2%.
U.S. Department of Labour on Thursday reported that the number of individuals filing for initial jobless benefits in the week ended 25th March fell by 3,000 to 258,000 from previous week’s total of 261,000 against the expectations of a fall of 13,000 to 248,000.
U.S. Commerce Department reported that personal spending rose 0.1% in the month of February from 0.2% rise in January against the expectation of a rise of 0.2%. Personal income rose by 0.4% in the month of February which was largely in line with the expectations followed by a rise of 0.3% in January.
Euro depreciated by 1.07% against USD last week after Reuters reported that European Central Bank policymakers are wary of adjusting their policy in April amid concerns over a potential surge in borrowing costs.
British Pound marginally appreciated by 0.06% against USD last week. British Prime Minister Theresa May triggered Article 50, formally beginning the two-year process of the UK’s exit from the European Union. National Statistics reported that its final reading for fourth quarter gross domestic product was an increase of 0.7% which was largely in line with expectations. On yearly basis, GDP rose by 1.9% in the fourth quarter from the previous estimate of a growth rate of 2%.
Asian currencies were marginally up last week against USD. Australian Dollar appreciated by 0.22%, New Zealand Dollar depreciated by 0.65%, Japanese Yen depreciated by 0.51% against the USD and appreciated by 0.57% against the Euro. South Korean Won appreciated by 0.38%, Philippines Peso appreciated by 0.09%, Indonesian Rupiah appreciated by 0.04%, Indian Rupee appreciated by 0.87% against the USD and by 1.94% against the Euro, Chinese Yuan depreciated by 0.07%, Malaysian Ringgit appreciated by 0.02% and Thai Baht appreciated by 0.64%.