Dollar Little Changed Amidst Holiday Trading

January 19, 2015

Washington (Jan 19)  The dollar is little changed overall against its major competitors at the start of the new trading week. With US equity and bond markets closed today for the Martin Luther King Jr. holiday, there has been little news to drive trading.

Investors will be watching for a batch of US housing data later this week. The housing market index for January is due on Tuesday and housing starts for December are slated for Wednesday. Finally, existing home sales for December are scheduled for Friday.

The  European Central Bank  will hold its next monetary policy meeting on Thursday. Investors are expecting the ECB to announce further quantitative easing measures at the meeting, likely including government bond purchases.

Investors will also be watching for the result of the Greek elections on Sunday. Concerns over a potential Greek exit from the Eurozone have subsided, but investors are now worried that the Syriza party will roll back austerity measures if it proves victorious.

International Monetary Fund Managing Director  Christine Lagarde  cautioned that there would be consequences to  Greece  restructuring its debt after  January 25  election.

"Collective approaches are always good at the European level," she told the Irish Times in an interview.

"As a principle, collection endeavours are welcome but at the same time a debt is a debt and it is a contract," Lagarde said. "Defaulting, restructuring, changing the terms has consequences on the signature and the confidence in the signature."

The dollar has pulled back from around  USD1.1550  against the Euro this morning, to around  USD1.1610  in the afternoon. The US currency is slightly off an 11-year high of  USD1.1459  , which was set on Friday.

Eurozone construction output fell slightly in November, after rising in the previous month, figures from Eurostat showed Monday. Production in construction dropped 0.1% monthly in November, in contrast to a 1.1% increase in October, which was revised from 1.3%. In September, output dropped 1.1%.

Eurozone's current account surplus for November declined from a year ago, figures from the  European Central Bank  showed Monday. The current account surplus decreased to  EUR 18.1 billion  from  EUR 19.5 billion  in the same month last year. In October, the surplus was  EUR 19.5 billion  .

The buck has been hovering around the  USD1.5150  level against the pound sterling Monday. The US currency reached a low of  USD1.5178  and is currently trading around  USD1.5125  .

Property prices in the  UK  recovered in January, after declining in the previous two months, as the recent stamp duty changes made homes cheaper for some first time buyers, figures from property-tracking website  Rightmove  showed Monday.

The average asking price for a house in the  UK  rose 1.4% from the previous month. The average price climbed to  GBP 273,275  from  GBP 269,477  .

That follows the revised 2.2% contraction in December, lesser than the 3.3% decline estimated earlier. In November, prices had dropped 1.9%.

The greenback slipped to a low of  Y116.921  against the Japanese Yen Monday, but has since bounced back to around  Y117.590  .

Consumer confidence in  Japan  increased more than expected in December, figures from the  Cabinet Office  showed Monday. The consumer confidence index rose to 38.8 in December from 37.7 in the previous month. Economists had forecast the index to rise to 38.5.

 Japan's  industrial production declined less than initially estimated in November, final figures from the  Ministry of Economy and Trade  and Industry showed Monday. Industrial production dropped a seasonally adjusted 0.5% month-on-month in November, revised from a 0.6% fall. In October, production grew 0.4%.

Source: RTTnews

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