U.S. Treasury Secretary Expects Strong Economic Data in Second Half
U.S. Treasury Secretary Expects Strong Economic Data in Second Half
U.S. Treasury Secretary Jack Lew said Wednesday that he expects strong economic data for the second half of the year after lackluster growth in the first quarter.
"After a harsh winter that restrained growth in the first quarter, we are still expecting the underlying strength of the economy that was evident last year to result in a strong second half of this year," Lew said in a speech in Jerusalem at a conference of the U.S.-Israel Joint Economic Development Group.
Lew said recent economic data supports his optimistic outlook. In May, the U.S. economy added 217,000 new jobs, after similar job growth in the previous three months, although unemployment in May remained flat at 6.3%. Inflation has also been picking up, with the consumer-price index rising 0.4% on the month in May.
In the first quarter, the U.S. economy grew just 1%. This recently caused the International Monetary Fundto cut its growth outlook for the U.S. economy in 2014 to 2% from 2.8%.
Lew's comments came hours before the U.S. Federal Reserve is scheduled to issue an outlook on the economy as well as comments on monetary policy.
Lew spoke along with Israeli finance minister Yair Lapid at an annual meeting of Israeli and American economists and policy makers.
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Gold Falls on Strong Dollar
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Gold for August delivery, the most actively traded contract, was recently down 0.7% at $1,178.10 a troy ounce on the Comex division of the New York Mercantile Exchange.
The dollar rebounded after several days of declines Thursday, as U.S. economic data showed retail sales in May increased in line with expectations. A stronger dollar tends to dent prices for gold, which is denominated in dollars and becomes more expensive for foreign buyers when the buck rises.
The Wall Street Journal Dollar Index, which gauges the dollar against 16 currencies, was recently up 0.5% to 86.50.
“Gold is being pushed around by a stronger dollar,” said Frank Lesh, a broker at Futurepath Trading.
In the longer term, “there is not much interest in gold at the moment. It just hasn’t been a very good performer, and other assets have been more rewarding,” Mr. Lesh said.
Expectations of rising interest rates have weighed on gold in recent months. Prices are down more than 4% from May highs, while assets in the world’s biggest gold exchange-traded fund, the SPDR Gold Trust, have dwindled to 704.22 metric tons, their lowest level since September 2008.
“As long as ETF outflows continue, the gold price is unlikely to make any significant gains,” analysts at Commerzbank said in a note.
the source
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Why the Strong Dollar Won’t Pack the Same Profits Punch
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The euro shouldn’t be kicking around U.S. companies’ earnings any more.
It caught fire on Thursday, jumping 1.8% against the dollar after the European Central Bank announced a fresh round of stimulus measures while playing down the potential for more rate cuts. That caught traders who had forecast a widening divergence between ECB and Federal Reserve policies off guard, making for a violent swing.
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For equity investors, however, what happened to the euro last week matters less than what happened to it about a year ago. That was when its sharp decline, which had started in mid-2014, finally abated. Indeed, as of Friday the euro was up 6.2% from a year earlier.
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The euro matters far more for U.S. multinationals than the overall economy. While the currency area counts for just 15% of U.S. exports, Commerce Department figures show that as of 2013 euro-area operations account for about 40% of the sales of majority-owned affiliates of U.S. multinationals abroad. Japan, by contrast, accounted for about 4% of those sales.
the source
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Strong us dollar boosts regional tourism
4% rise in international visitor numbers in Americas in first half of 2016
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The UNWTO World Tourism Barometer reports that international arrivals in the Americas increased by 4% in the first half of 2016, led by Central America and South America. Europe (+3%) showed mixed results, with solid growth in many destinations offset by weaker performance in others.
“Tourism has proven to be one of the most resilient economic sectors worldwide,” said UNWTO Secretary-General, Taleb Rifai. “It is creating jobs for millions, at a time when providing perspectives for a better future to people of all regions is one of our biggest challenges. But tourism is also creating bonds among people of all nations and backgrounds, bringing down stereotypes and ghting fear and distrust.”
the source
US Dollar Outlook Bullish on FOMC as Virus-Induced Recession Risks Swell
Overnight index swaps are not pricing in a rate cut at the upcoming FOMC meeting on April 29, though the subsequent press briefing and commentary therein may induce cross-asset volatility. The US Dollar may rise if Fed Chairman Jerome Powell paints a worrisome picture for global growth in light of the coronavirus pandemic as the central banks pumps trillions of dollars of liquidity into the financial system.
At the time of writing, the Fed’s balance sheet stands over $6.6 trillion. In an attempt to calm inter-bank stress, monetary authorities also announced a temporary suspension on limits of uncollateralized intraday credit exchanges. However, the most controversial measure – arguably – that the Fed has done is agree to purchase junk-rated bonds as part of its broader asset-purchasing policy measure.
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US Dollar Outlook: Weekly Breakdown
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- Scope for further declines in the US Dollar could narrow
- Markets were reminded of volatility risk as S&P 500 sank
- Key risks: retail sales, Powell, virus wave, balance sheet
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US Dollar Ripe for Reversal: GDP, Fed, Earnings Raise Volatility Risk
The US Dollar may bottom out in a jam-packed week of event risk that could rekindle market volatility. All eyes are on the Fed, US GDP, the earnings season and more fiscal stimulus.
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EUR/USD: bullish ranging with 1.1919 key resistance level
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With the markets focused on coronavirus vaccines, it was easy to miss news last week that Poland and Hungary have blocked the EU’s recovery fund; another potential negative for the Euro.
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Markets Week Ahead: Russell 2000, S&P 500, Gold, and USD
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The S&P 500 declined as the Russell 2000 soared as markets digested Joe Biden’s fiscal package. Gold prices sank as the US Dollar shined. The week ahead is fairly busy, with bank and tech earnings,...
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US Dollar: bullish ranging near daily bearish reversal; 96.9 is the key
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Fresh data prints coming out of the US may prop up the Dollar as Non-Farm Payrolls (NFP) are expected to increase for the sixth consecutive month.
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Weekly Fundamental US Dollar Forecast
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Despite a disappointing headline figure, the September US NFP report was another milestone on the road to the Fed tapering asset purchases.
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Markets Week Ahead: Hang Seng
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Equity markets looked the worst in the Asia-Pacific region. Chinese regulatory woes and US de-listing concerns played a key role. The Hang Seng Tech Index plummeted over 10 percent as shares like Alibaba, Tencent and Didi declined 13.81%, 11.17% and 53% respectively. All of this risk aversion induced demand for safety, boosting the US Dollar.
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US Dollar Forecast Q2 2022
It is difficult to tell what role the Dollar will play in the global financial system heading into the second quarter of 2022. On the one hand, traditional risk assets have held back the tide of a more prolific collapse while interest rate expectations have exploded higher. Alternatively, there exists a growing din of concern that markets have over-reached in the post-Great Financial Crisis run and a necessary ‘de-risking’ has yet to occur.
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Daily Dollar Index chart is located in the bullish area above 200 SMA by crossing 100.52 resistance level to above for the primary bullish trend to be continuing. Alternatively, the daily price will be on secondary ranging within the primary bullish trend waiting for direction.
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Weekly Fundamental US Dollar Forecast
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The US Dollar (via the DXY Index) has lost ground for two consecutive weeks.
Interest rate differentials have narrowed among the major currencies, undercutting a key source of US Dollar strength in recent months. Incoming US economic data won’t do any favors for the ‘US recession’ calls, but key US labor market figures will likely remain strong. The US Dollar has a bearish bias heading into the first week of June.
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Weekly Fundamental US Dollar Forecast
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Fed speakers are expected to deploy an aggressive hawkish tone this week.
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