December 8, 2016
Indicative Interbank spot sell rates only as of 9:00 AM PST.
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United States (US) Jobless Claims fell by 10k during the week ended December 3rd, 258k, compared with market expectations for a decline to 255k.The prior week was revised moderately lower from 268k to 233k.The 4-week average rose by 1.0k to 253k and the 13-week average fell by 0.1k to 254k. Continuing Claims fell by 79k during the week ended November 26th to 2,005k, after the prior week was revised slightly higher from 2,081k to 2,084k. The 4-week average fell by 10k to 2,029k. On a non-seasonally adjusted basis, Continuing Claims rose by 323k to 2,070k during the week ended November 19th.
Australia’s dollar traded at 74.57 U.S. cents at 11:33 am PST and New Zealand dollar traded at 71.74 U.S. cents. Australia’s trade deficit worsened by $269 million to $1,541 million in October. But in trend terms the deficit improved to a 20-month low of $1,565 million. The rolling 12-month deficit also improved from $32.5 billion to $29.7 billion (the smallest deficit in 13 months). Australia's rolling annual trade surplus with China hit a 12-month high of $14.23 billion in October although still well down from the record high of $42.8 billion set in April 2014.
Euro traded at 1.0609 against USD at 11:33 am PST. The European Central Bank has scaled back its quantitative easing program me from €80bn to €60bn a month from April 2017 and will extend it to the end of next year, in a move that responds to hawks’ concerns about ultra-loose monetary policy but which could unsettle markets. It has held rates as expected. ECB holds rates at 0% but extends QE to December 2017. Level of bond buying programme cut to €60bn per month from April 2017. Asset purchase parameters broadened, including halving of minimum maturity to 1 year. Sovereign bond prices recover as Draghi insists tapering has not been discussed. Euro slides against the dollar.
British Pound exchange rate is 1.2572 against USD at 11:33 am PST. The house price balance in the United Kingdom jumped in November rising 30%. That beat forecasts for a gain of 26% and was up sharply from 23% in October. By region, the strongest areas for price growth were the North West and the West Midlands.
Japanese Yen traded at 114.11 per USD at 11:33 am PST. Japan’ trade balance rose more-than-expected last month. The Ministry of Finance said that the country’s trade balance rose to a seasonally adjusted 0.47T, from 0.36T in the preceding month whose figure was revised up from 0.35T. Analysts had expected the trade balance to rise to 0.41T last month. On another note, Japan's economy just grew by $278 billion. This massive burst of statistical growth came about via the government's adoption of a new base year and incorporation of international accounting standards, such as adding research and development spending to capital expenditure figures. Prime Minister Shinzo Abe vowed last September to raise nominal GDP by nearly a quarter to 600 trillion yen by 2020 to show voters he was focusing on reviving the economy ahead of an upper house election in July 2016. Revised data out on Thursday showed nominal gross domestic product reached 532.2 trillion yen ($4.7 trillion) in the fiscal year ending in March 2016 - getting remarkably close to Abe's goal of 600 trillion yen.
Canadian dollar traded at 1.3189 per USD at 11:33 am PST. Canada's housing market showed some signs of softening in November as new construction starts fell, but separate data showed prices rose in October and permits for future building jumped, suggesting the market could have strength in reserve. Housing starts fell 4.3% to 183,989 units in November from a month earlier as construction of multiple-unit buildings in Ontario dropped sharply, offsetting strong growth in British Columbia. The decline in starts was sharper than analysts had expected but a separate report showed the value of building permits jumped 8.7% in October, suggesting housing starts could bounce back in the coming months
Onshore Chinese yuan traded at 6.8840 per USD at 11:34 am PST and offshore Chinese yuan traded at 6.9115 per USD. China's November dollar-denominated imports grew 6.7%, the fastest pace of annualized growth since September 2013, while exports were up 0.1% in dollar terms. A Reuters poll of analysts had expected November exports to have fallen 5% from the previous year, while imports were forecast to drop 6.2%. The trade data had missed the expected release time by several hours. Chinese shares were lower, with the Shanghai composite closed 0.2% lower or 6.51 points at 3,215.72 and the Shenzhen composite finished off 0.62% or 12.95 points at 2,077.37.
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.