The dollar has given back its early gains against its major competitors Monday, following the release of the weaker than expected existing homes sales report for January. Some investors have also remained on the sidelines at the start of the trading week. Federal Reserve Chair Janet Yellen will begin two days of testimony before the House and Senate on Tuesday and investors will be watching closely for clues as to when the Fed plans to begin raising interest rates.
Existing home sales in the U.S. fell by more than anticipated in the month of January, according to a report released by the National Association of Realtors on Monday. NAR said existing home sales tumbled 4.9 percent to an annual rate of 4.82 million in January from an upwardly revised 5.07 million in December.
Economists had expected existing home sales to fall to a rate of 4.95 million from the 5.04 million originally reported for the previous month.
After meetings in Brussels, Greece has reached an agreement with eurozone creditors to extend its bailout agreement for four months. The agreement will help Greece avoid an economic crash and an ouster from the Eurozone. Greek finance minister Yanis Varoufakis has pledged to honour all debts and initiate reform to bring back the country to a financial stability. The minister added that the country would continue with painful reforms.
The bailout program for Greece was due to expire on February 28. The doubts about reaching a deal have forced customers of local banks to transfer their money out of Greece. There were reports that millions of euros were moved out in the last week.
The dollar rose to an early high of $1.1295 against the Euro Monday, but has since pulled back to around $1.1345.
German business confidence improved for a fourth consecutive month in February to its highest level in seven months, but the pace of strengthening was modest amid concerns over the uncertainty surrounding the Greek situation.
The Ifo Business Climate climbed to 106.8 from January’s 106.7. Economists had forecast a stronger score of 107.6. The latest reading, however, was the best since July last year, when it was 108.1.
The buck climbed to a 4-session high of $1.5332 against the pound sterling Monday morning, but has sharply reversed to a 3-day low of $1.5465 this afternoon.
British retail sales growth eased sharply in February to its weakest level since late 2013, after six months of robust performance, survey data from the Confederation of British Industry revealed Monday. The balance of the CBI’s distributive trades survey dropped to +1 from +39 in January. Economists were looking for a figure of +35.
The members of the Bank of Japan’s monetary policy committee believe that the pace of the country’s economic recovery remains moderate, minutes from the bank’s policy meeting on January 20 and 21 revealed on Monday.
They also noted that capital spending was on the upswing as corporate profits continued to grow.
“Japan’s economy has continued to recover moderately as a trend, and effects such as those of the decline in demand following the front-loaded increase prior to the consumption tax hike have been waning on the whole. Overseas economies — mainly advanced economies –have been recovering, albeit with a lackluster performance still seen in part,” the minutes said.
The members did concede that they were likely to miss their desired inflation target of 2 percent following years of deflation – due mainly to tumbling energy prices.
Citing lower crude oil prices, the BoJ downgraded its core inflation estimate for fiscal 2015 to 1 percent from 1.7 percent. But the central bank lifted the forecast for fiscal 2016 to 2.2 percent from 2.1 percent.
“Inflation expectations appear to be rising on the whole from a somewhat longer-term perspective,” the bank said. “The year-on-year rate of increase in the CPI is likely to slow for the time being, reflecting the decline in energy prices.”
The greenback rose to a 3-session high of Y119.352 against the Japanese Yen Monday morning, but has since retreated to around Y118.910.
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