Foreign Exchange Market Update
December 2, 2016
Indicative Interbank spot sell rates only as of 9:00 AM PST.
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United States (US) Payroll Employment rose by 178k in November, compared with market expectations for an increase of 180k. There were modest revisions to the previous two months which subtracted a total of 2k jobs. The unemployment rate dropped, as household employment grew more than the decline in labor force. Household employment, a different survey than the nonfarm payroll data, rose by 160k while the labor force fell by 226k in November. Over the past year, the unemployment rate has declined by 0.4 percentage points, the result of 2,641k more people finding jobs as 2,119k more people entered the labor force. Both hourly and weekly earnings fell modestly after a moderate increase in October. The 3-, 6- and 12-month annualized averages are between 2.4 and 2.5%, still higher than the past of gains in 2015 (2.0%) and 2014 (2.2%). The workweek was unchanged and the 3-month average is now 34.4.
Australia’s dollar traded at 74.47 U.S. cents at 11:20 am PST and New Zealand dollar traded at 71.39 U.S. cents. Australia's retailers enjoyed another jump in sales in October, an outcome that augers well for momentum in consumer spending going into the all-important Christmas shopping period. The 0.5% rise for October beat market forecasts for a 0.3% uptick and marked the best three-month period for sales since mid-2014. That was welcome news after a run of disappointing figures this week suggested the economy had all but stalled in the third quarter
Euro traded at 1.0658 against USD at 11:20 am PST. Eurozone producer prices rose for the second straight month in October, and at a faster-than-expected pace. Industrial producer prices climbed 0.8% month-over-month in October, exceeding economists' expectations for an increase of 0.4%. That was also faster than the 0.1% slight rise in September. Excluding energy, producer prices edged up at a stable rate of 0.1% in October from a month ago. Prices in the energy sector alone grew by 2.6%. On an annual basis, producer prices fell at a slower pace of 0.4% in October, following a 1.5% decline in September. It was forecast to decrease by 1.0%.
Japanese Yen traded at 113.79 per USD at 11:21 am PST. The monetary base in Japan was up 21.5% on year in November, coming in at 417.657 trillion yen. That follows the 22.1% spike in October. Banknotes in circulation added 4.7% on year, while coins in circulation gained 1.0%. Current account balances surged an annual 28.2%in November, including a 26.8% jump in reserve balances. The adjusted monetary base soared 26.0% to 412.167 trillion yen, after rising 17.9% a month earlier.
Canadian dollar traded at 1.3294 per USD at 11:21 am PST. Canada's jobless rate dipped in November to 6.8%, as the economy created 10,700 jobs and fewer people looked for work. After two months of unexpectedly high job creation numbers, November's results were more modest, but still enough to lower the unemployment rate from seven per cent the previous month. Compared to a year earlier, there are 183,000 more jobs, but concern remains over the quality of employment, as most of the jobs created were part time, while the number of full-time jobs continues to erode. The number of people working part time increased by 214,000 compared to a year earlier, while full-time work dipped by 30,000 jobs. The total number of hours worked rose 1.1% and average wages were ahead by 1.5%on an annual basis, generally lower than inflation.
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.