Foreign Exchange Market Update
August 24, 2016
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) The latest Mortgage Bankers Association (MBA) data recorded a seasonally adjusted 2.1% decline in applications for the latest week ending August 19th. This followed a 4.0% decline the previous week and maintained the underlying trend of declines over the past few weeks. Applications to re-finance homes declined 3% on the week, the second successive decline, although there was still a year-on-year increase of close to 45%. Applications to purchase a home retreated by 0.3% on the week. On another note, US Federal Housing Finance Agency (FHFA) house prices index rose 0.2% in June after a 0.2% gain for May and slightly weaker than the 0.3% expected. There was a 1.2% increase in prices for the second quarter to give a 5.6% gain from the second quarter of 2015, but overall evidence suggests the rate of price increases is slowing due to affordability issues. Also on another note, pace of existing home sales decreased 3.2% last month from June to a seasonally adjusted rate of 5.39 million. It was the first time sales had decreased since February.
Australia’s dollar traded at 76.11 U.S. cents at 10:16 AM PST and New Zealand dollar traded at 73.12 U.S. cents. Australia’s skilled vacancies fell 0.6% month-on-month in July, the first decline in five months. Growth in the prior month was also scaled back to 0.1%, down from the 0.8% originally stated. On another note, New Zealand’s headline unadjusted monthly trade deficit came in slightly wider than expected in July at NZD 433 million. The values of export were up 2.2% month-on-month in July. Looking at components, dairy exports rose 0.6% in sequential terms, and together with solid mechanical machinery and aluminum exports, this counters declines seen in meat, fruit and forestry exports. Values of import in seasonally adjusted terms increased 5.6% month-on-month, following two consecutive declines. Stripping petroleum products, values of import rose 6.3% month-on-month, with the major one-off import contributing.
Euro traded at 1.1266 against USD at 10:17 am PST. Germany’s gross domestic product grew at a quarterly rate of 0.4%, or an annualized rate of 1.7%. It marks a significant slowdown from the first quarter, when the economy expanded at a quarterly clip of 0.7%, as the mild winter weather propelled construction. The outcome is in line with an earlier GDP flash estimate. But Germany’s economy slightly outpaced the eurozone, which saw its quarterly growth rate ease to 0.3% from 0.6% in the first three months of the year.
Japanese Yen traded at 100.49 per USD at 10:17 am PST. Japan’s index of leading economic indicators rose more-than-expected last month. Japan’s index of leading economic indicators rose to a seasonally adjusted 99.2, from 98.4 in the preceding month. Analysts had expected Japan’s index of leading economic indicators to rise 98.4 last month.
Onshore Chinese yuan traded at 6.6562 per USD at 10:17 am PST and offshore Chinese yuan traded at 6.6704 per USD. China's yuan bounced back to be the fifth most-active currency for global payments in July, thanks to a big fall in payments in other currencies. The yuan's market share increased to 1.9% in July from 1.72% in June. While the overall yuan payments declined by 0.68% from June, payments in all currencies fell by 10.08%.
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.