Following a relatively quiet week, the US Dollar ended the week on a weaker footing against the majors. The Euro surged against the US Dollar to reach a high of 1.3796, breaking all major resistance levels, to close the week at 1.3765. The Sterling Pound followed the move by reaching a high of 1.5217. The Yen range traded between 89.60 and 91.00 levels. Finally, the Swiss Franc strengthened against the greenback at the end of the week to reach 1.0577.
Trade Gap Shrinks
The trade deficit narrowed by 6.6% to 37.3 billion Dollars in January resulting from a decline in imports by 1.7% as the US imported the lowest monthly quantity of oil since February 1999. In parallel, exports declined by 0.3%, the first drop since April 2009 as demand for products like aircrafts and cars plummeted.
In parallel, President Barack Obama outlined a plan to boost exports by calling on increasing credit for small and medium sized businesses by 2 billion Dollars. The plan aims to promote American goods overseas by easing restrictions on certain goods abroad and establishing a cabinet-level panel on exports.
Initial jobless claims fell to 462,000 less than the expected 460,000, and down 6,000 from the previous revised figure of 468,000 claims, indicating that the labor market recovery is slowing down. The continuous jobless claims, the number of people still receiving jobless benefits, rose to 4.56 million in the last week of February.
University of Michigan consumer sentiment survey fell to 72.5 in March from February’s final reading of 73.6.
Numbers from Germany
German industrial production rose in January by 0.6% versus a previous fall of 2.6% as energy output surged by 8.8% during the cold winter, helping to offset a collapse in construction activity which dropped by 14.3% in January.
German exports unexpectedly plummeted in January after rising the previous month. Exports sank 6.3% from December, while Imports rose to 6%. As a result, Germany’s trade surplus narrowed from €13.4 to €8 billion in January.
Greece Hit by Strikes over Austerity Plan
Following Greece’s approval of a €4.8 billion austerity package to cut wages, freeze pensions and raise consumer taxes, strikes and clashes between the police and civilians took place during a demonstration in Athens. Thousands of striking workers protested against the measures that the Greek government said it has no choice but to implement. The country is under intense pressure from the European Union to reduce its deficit from 12.7% of economic output in 2009 to 8.7% this year.
Trade Gap Widens
UK exports endured their largest plunge in more than three years during January, curbing hopes that trade would quickly help raise the deteriorating economy. Exports fell by 6.9%, the sharpest fall since July 2006. The decline in exports overshadowed the drop in imports leaving the UK trade deficit wider at -£8 billion down from the previous -£7 billion.
Manufacturing Production Drops
UK Manufacturing production dropped in January for the first time in five months indicating that the economy is still in its early stages of recovering from the longest recession on record. Factory production fell by 0.9% in January from a previous hike of 0.9%.
Australia’s Unemployment Rate Rises
The Australian unemployment rate rose to 5.3% in February in line with market forecasts, up from last month’s revised figure of 5.2%. The national gain in full-time positions of 11,400 barely covered the 11,000 part-time positions lost, leaving a net increase of 400 jobs, the weakest month since August 2009.
Dinar at 0.28780
The USDKWD opened at 0.28780 on Sunday morning.
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