Asian currencies were largely up against the USD last week. Australian Dollar appreciated by 4.39%, New Zealand Dollar appreciated by 2.75%, Japanese Yen appreciated by 0.23% against USD and depreciated by 0.45% against Euro, South Korean Won appreciated by 2.88%, Philippines Peso appreciated by 1.12%, Indonesian Rupiah appreciated by 1.90%, Indian Rupee appreciated by 2.29% against USD and appreciated by 2.05% against Euro, Chinese Yuan appreciated by 0.5%, Malaysian Ringgit appreciated by 2.45% and Thai Baht depreciated by 1.07%.
Asian currencies last week rallied sharply after market sentiment improved in the later part of the week on the back of upbeat economic reports from Australia and the U.S., which eased concerns over slowing global economic growth. The sharp rise in oil prices last week increased the risk appetite of global investors, reducing demand for safe heaven assets. Market sentiment was weak during early trading sessions as PBoC on Monday guided Yuan lower, prompting fresh concerns over the world’s second largest economy. However at G20 meeting in Shanghai, PBOC head Zhou Xiaochuan tried to ease concerns that China’s economic strategy hinged on a weaker Yuan, saying that there is no basis for a persistent depreciation in the currency. PBoC also cuts banks’ reserve requirement ratio (RRR) to free up liquidity.
Australian Bureau of Statistics on Wednesday reported that Australia’s GDP rose by 0.6% in the fourth quarter from 0.9% in the preceding quarter against the expectation of GDP to rise by 0.4%.
Brent crude oil price last week, sharply rose by 4.89% to 36.9 USD/bbl from 35.18 USD/bbl as OPEC called for stabilization of prices.
USD started the week on a higher note as previous to last week release of U.S. GDP data continued to lend support to the currency, as the pace of slowdown was not as steep as initially estimated. However, USD ended the week in negative territory after disappointing U.S. jobless claims data and lack of wage growth. USD Index (DXY), which tracks the movement of the USD against six major currencies, declined by 0.82% on weekly basis closing at levels of 97.34.
U.S. National Association of Realtors on Monday reported that its pending home sales index fell by 2.5% in the month of February to hit a one-year low level against the expectation of a rise of 0.5%.
Institute for Supply Management on Tuesday reported that its index of purchasing managers inched up to 49.5 in the month of February from a reading of 48.2 in January and against the expectation of a rise to 48.5.
ADP on Wednesday reported that non-farm private employment rose by 214,000 in the month of February, surpassing the expectations of an increase of 190,000 followed by 193,000 jobs created in January.
U.S. Department of Labour on Thursday reported that number of individuals filing for initial jobless benefits in the week ended 27th February rose by 6,000 to 278,000 from the previous week’s total of 272,000 against the expectation of a decline of 1,000 to 271,000.
U.S. Labour Department on Friday reported that the U.S. economy created 242,000 jobs in the month of February against the expectations of 190,000, followed by 172,000 jobs in January. The U.S. unemployment rate remained unchanged at 4.9% last month, which was in line with expectation. Wage growth came in below expectations despite the strong job numbers.
Data showed that the U.S. trade deficit widened to USD 45.68 billion in the month of January from USD 44.70 billion in December and against the expectation of USD 44 billion.
Slow price growth in Eurozone has fuelled the prospect of the European Central Bank expanding its monetary stimulus program in March to boost growth and inflation. The annual inflation rate fell to negative 0.2% from 0.3% in January and against the expectation of flat growth. Positive economic data released in the later part of the week gave some support to the Euro but the single currency broadly remained under pressure after European Central Bank board member Benoit Coeure signalled on Wednesday that the ECB will ease monetary policy this month. Euro on weekly basis appreciated by 0.65% against USD.
Data released on Thursday showed that Eurozone retail sales increased by 0.4% in the month of January against the expectation of a rise of 0.1%. Year-over-year, retail sales rose by 2.0% in the month of January against the expectations for a gain of 1.3% followed by 2.1% rise February.
Russian Ruble sharply appreciated by 6.18% against USD last week amid rising oil prices and reached its highest point since the beginning of January. On Friday oil prices rose in anticipation of an OPEC meeting later this month, which is devoted to discussing the stabilization of oil prices.