Foreign Exchange Market Update
January 24, 2017
Indicative Interbank spot sell rates only as of 9:00 AM PST.
PLEASE CALL THE FX DEPARTMENT AT (626) 279-3235 FOR THE MOST CURRENT RATE
United States (US) Existing home sales fell more than expected in December but there were upward revisions to November data that nearly offset the miss. Low inventories remain an important theme in existing home sales inventories fell 10% in December, pushing months' supply to just 3.6 months, the lowest level in 15 years. Home re-sales have averaged 5.57 million over the past 3 months and 5.48 million over the past 6 months, suggesting that the housing market is still improving. The median sales price finished 2016 at 232k, up 4% on the year.
Euro traded at 1.0741 against USD at 11:47 am PST. Business activity in euro zone eased slightly in January according to the latest purchasing managers index falling to 54.3 from 54.4 in December. The euro zone economy has started 2017 on a strong note. The January flash PMI is signaling respectable quarterly GDP growth of 0.4 percent with a broad-based expansion across both manufacturing and services. Services activity rose to 53.9 from 52.9 in December. Manufacturing PMI dropped slightly from 53.5 to 53.4. Despite the modest fall, manufacturing firms noted a fifth successive rise in output. In Germany, the largest EU economy, growth in the private sector showed some signs of easing but manufacturing remained strong. The flash German PMI composite was 54.7 from 55.2 in December, reaching a four-month low. Services activity dropped from 54.3 last month to 53.2 but manufacturing PMI was slightly higher at 56.5. However, German companies in both services and manufacturing expect a healthy growth throughout this year.
British Pound exchange rate is 1.2521 against USD at 11:47 am PST. Britain's public finances deficit narrowed by less than expected in December, but the Treasury could still hit its target for the year after November's figures were revised to show a better performance than initially thought. According to data released by the Office for National Statistics (ONS) on Tuesday (24 January), public borrowing last month declined 5% month-on-month to £6.9bn ($8.6bn), compared with expectations for a £6.7bn figure. Meanwhile, the previous month's deficit was revised from £12.6bn to £11.3bn, which brought the borrowing tally for the first nine months of the 2016-17 tax year up to £63.8bn, 14.3% lower than in the corresponding period 12 months earlier.
This market update is prepared by Cathay Bank for informational purposes only and does not constitute any form of legal, tax or investment advice, nor should it be considered an assurance or guarantee of future exchange rate movements or trends. This information is provided without regard to the specific objectives, financial situations or needs of any recipient. Cathay Bank does not make any representations or warranties about the accuracy, completeness or adequacy of this market update.