USD was under pressure last week as weak economic data from the US during the week weighed on the currency. USD started the week on a high note as it strengthened on Monday on the expectation that Fed will hike rates in the coming month but later in the week there was a string of weak economic data, which brought USD under heavy selling pressure as it raised concerns that the Fed might delay hiking interest rates until late 2015. USD Index (DXY), which tracks the movement of the USD against six currencies, posted a decline of 1.84% in the last week. On yearly basis USD has strengthened by 22.16%.
U.S. economic data released on Tuesday showed that retail sales rose by 0.9% in the month of March against expectations of 1% rise. In February retail sales declined by 0.5%.
On Wednesday, Federal Reserve Bank of New York said that general business conditions index declined to -1.2 in April from 6.9 in March. The index disappointed the expectation of 7. U.S. industrial production in the month of March declined by 0.6% against the expectation of 0.3% decline. In February industrial production rose by 0.1%. Manufacturing production rose by 0.1% in March, which was in line with expectations.
U.S. Department of Labour report released on Thursday showed that number of individuals filing for initial jobless claims in the week ending 11th April increased by 12,000 to 294,000 from the previous week’s total of 282,000.
U.S. inflation data released on Friday showed that consumer prices rose by 0.2% in the month of March against the expectations of increase of 0.3%. In the month of February consumer prices in U.S. rose by 0.2%. On yearly basis consumer prices fell by 0.1% in the month of March against the expectation of 0.1% rise. Core consumer prices (excludes food & energy) rose by 0.2% in the month of March in line with expectations.
U.S. consumer sentiment index rose to 95.9 in April from 93.0 in March, the reading is better than the expectations of 94.
Euro appreciated by 1.90% in the last week against the USD even as ECB president Mario Draghi in a press conference downplayed the speculation that recent signs of recovery in the Eurozone economy will lead to tapering of ECB bond buying program. He also said that ECB is continuously monitoring inflation and expects that inflation will rise to reach its 2016 & 2017 target levels.
On Tuesday, data showed that euro zone’s industrial production rose by 1.1% in February beating the expectation of 0.4% rise. In the month of January Industrial production declined by 0.3%.
Brazilian Real appreciated by 1.14% against the USD last week. Real continued its previous week’s momentum as President Dilma Rousseff signalled a fiscal consolidation program.
Russian Ruble continued to gain strength as the currency in the last week appreciated by 3.12% against the USD. The gain was due to the sharp rise in the crude oil prices last week, which gained by 9.64% from 57.87 USD/bbl to 63.45 USD/bbl. The rise in oil prices of late has given strong support to the currency. But on Friday the Ruble trimmed its gain by 4.15% after Central Bank Governor Elvira Nabiullina said that the currency had found its equilibrium and its appreciation provided a basis for further rate cuts.
Asian currencies last week were up against USD. Australian Dollar appreciated by 1.30%, Japanese Yen appreciated by 1.11%, South Korean Won appreciated by 1.83%, Philippines Peso appreciated by 0.41%, Indonesian Rupiah appreciated by 0.60% and Chinese Yuan appreciated by 0.17%. Thai Baht depreciated by 0.62% while Indian Rupee marginally depreciated by 0.07% against the USD and by 2.46% against the Euro.