August 29, 2016
Indicative Interbank spot sell rates only as of 9:00 AM PST.
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United States (US) Personal Income rose by 0.4% in July , compared with market expectations for an increase of 0.4%. The prior month was revised higher from 0.2% to 0.3%. Personal Income is now 3.3% above its year ago level. Wages and Salaries rose by 0.5%, Wages are now 4.1% above year ago levels. Disposable Income rose by 0.4% and is now 3.6% above its year ago level. Consumer Spending rose by 0.3%, compared with market expectations of an increase of 0.3%. The PCE Price Index is unchanged by 0.0% and is now 0.8% above its year ago level. Meanwhile, the Core PCE Index rose by 0.1% and is now 1.6% above its year ago level. The July level is 2.7% annualized above its Q2 level. On another note, the Dallas Fed Index fell by 4.9 points in August to -6.2%, compared with market expectations for a greater decrease to -3.9%. This index is in negative territory and suggests that manufacturing activity in the Texas region contracted moderately. On an ISM-weighted basis, the index also expanded, indicating that the details were more positive than the headline figure.
Australia’s dollar traded at 73.08 U.S. cents at 9:54 AM PST and New Zealand dollar traded at 66.27 U.S. cents. New home sales in Australia decreased sharply in July, after rebounding in the previous month. Total home sales declined a seasonally adjusted 9.7% month-over-month in July, in contrast to an 8.2% climb in June.
Euro traded at 1.0585 against USD at 9:55 am PST. Consumer confidence in Italy has been dragged down by concerns over job security, with business confidence also witnessing a lag, further clouding prospects for the ailing economy. Italy’s consumer confidence index dropped to 109.2 in August, the lowest since July last year. That’s down from the 111.2 level measured in the previous month and below expectations for a more modest decline to 110.3. For the manufacturing sector, the confidence index dropped to 101.1 from 102.9. August’s reading is the weakest since February last year, but the index has been flat lining since the start of 2015.
Canadian dollar traded at 1.3362 per USD at 9:47 am PST. Canadians’ optimism about their own financial situation rose to the highest in more than a year last week, raising overall consumer confidence, in a sign Prime Minister Justin Trudeau’s boost of transfer payments has had an impact. The Bloomberg Nanos Canadian Confidence Index rose to 59.9 from 59.3 a week earlier, while the pocketbook subindex -- measuring personal finances and job security -- rose to 61.1 from 60.3 a week earlier. The subindex reached its highest point since May of 2015.
Onshore Chinese yuan traded at 6.3986 per USD at 9:56 am PST and offshore Chinese yuan traded at 6.4502 per USD. The increased pessimism comes after a period of calm that sent the measures to the lowest in at least nine months as the Federal Reserve held off on raising interest rates and investors bet that China would steady the yuan before it hosts a Group of 20 meeting in September. Traders are probing the People’s Bank of China’s willingness to allow the yuan to fall between the G-20 gathering and the currency’s entry into the International Monetary Fund’s Special Drawing Rights on Oct. 1, especially with the chances of Fed action increasing.
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.