Retail Sales in U.S. Increased Less Than Forecast in January

Sales at U.S. retailers rose less than forecast in January, depressed by a drop in demand at building material stores and restaurants that may reflect the influence of harsh winter weather. 

Purchases increased 0.3 percent, the smallest gain since a drop in June and followed a 0.5 percent December gain that was less than previously estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 0.5 percent rise. 

Sales at retailers like Gap Inc., Limited Brands Inc. and Macy’s Inc. topped analysts’ estimates last month as merchants used promotions to lure post-holiday shoppers before storms blanketed much of the U.S. mid month. Federal Reserve policy makers are among those saying bigger gains in employment are needed to ensure American consumers sustain spending. 

“The weather kept people shoveling snow rather than heading to the mall,” said Russell Price, a senior economist at Ameriprise Financial in Detroit, who accurately forecast the gain in retail sales. “The consumer’s role in the recovery will take greater prominence in coming months. We definitely need to see further improvement in the labor market to have continued increases in spending.” 

Manufacturing in the New York region sped up in February, and the cost of imported goods climbed last month, other reports today showed.

New York Manufacturing

The Federal Reserve Bank of New York’s general economic index rose to 15.4, the strongest reading since June. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut. 

Import prices climbed 1.5 percent in January, Labor Department figures also showed today. Excluding food and fuel, costs rose 0.6 percent. 

Stock-index futures held earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in March fell 0.2 percent to 1,325.5 at 8:45 a.m. in New York. 

The projected gain in retail sales was based on the median forecast of 79 economists in the Bloomberg survey. Estimates ranged from a gain of 1.1 percent to a drop of 0.5 percent. The December increase in sales was previously estimated at 0.6 percent. 

Eight of 13 major categories showed an increase in demand last month, led by auto dealers, grocery stores and service stations.

Gasoline Prices

Filling station sales advanced 1.4 percent. The data, which aren’t adjusted for inflation, got a boost from rising gasoline prices. Regular fuel in January reached an average $3.10 a gallon, or 11 cents more than December, according to AAA, the nation’s biggest motoring organization. 

Sales climbed 0.5 percent at automobile dealers, consistent with industry figures that showed car purchases climbed last month to a 12.54 million unit annual pace that was the best since the government’s cash-for-clunkers program in August 2009. 

Purchases excluding autos increased 0.3 percent, today’s report showed. They were projected to rise 0.5 percent, the survey median showed. 

Demand dropped 2.9 percent at building-material stores, the most since May. 

Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales increased 0.4 percent after a 0.1 percent decrease the prior month.

Restaurant Receipts

Restaurant receipts dropped 0.7 percent, the biggest decrease since March 2009. In contrast, the 1.3 percent gain at grocery stores was the biggest since August. 

Whole Foods Market Inc., the largest U.S. natural-goods grocer, last week raised its annual profit and revenue forecasts after the Austin, Texas-based company’s first-quarter earnings beat analysts’ estimates.

“Our results underscored signs that consumer confidence continues to improve,” Co-Chief Executive Officer Walter Robb said on a Feb. 9 conference call. 

Winter storms spread from the Midwest and the South to New England, covering 71 percent of the country with snow on Jan. 12, according to the National Climatic Data Center. 

Promotions and clearances lured customers after the holidays, helping retailers ring up sales early in the month before bad weather slowed shopping in the last two weeks, according to David Bassuk, head of the global retail practice at consultant AlixPartners in New York.

Chain-Store Sales

Sales at stores open at least a year at the more than 30 chains tracked by Retail Metrics climbed 4.4 percent in January for a 17th straight gain, surpassing its estimate of a 2.6 percent increase. 

Gap, a clothing retailer based in San Francisco, benefited from higher same-store sales at Banana Republic stores, while the Victoria’s Secret lingerie chain fueled results at Columbus, Ohio-based Limited. Department store Macy’s sales capped a year of “remarkable achievement in a period of economic uncertainty,” Chief Executive Officer Terry Lundgren said in a Feb. 3 statement. 

The recovery’s inability to create more jobs is one thing holding back consumers. While unemployment fell to 9 percent in January, from 9.4 percent in December, it has been 9 percent or higher since May 2009, the longest period of elevated joblessness since monthly records began in 1948. 

Fed Chairman Ben S. Bernanke and fellow policy makers are awaiting further proof of a durable pickup in the labor market that will lift growth. That’s one reason why they are pressing ahead with a second round of monetary stimulus worth $600 billion. 

Source: Bloomberg By Shobhana Chandra

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5 Major Currency Declined Caused by Big Indicator

This week, i am going to make an summary of 5 currency mover such as AUD,GBP,CHF,JPY, EUR toward USD currency. Moreover, if we look at AUD/USD currency for this week is slowly moving down. There have some fundamental factors which give a big influence for AUD currency mover like ANZ job advertisements m/m rise slightly from 1.2% (previous) to 2.4% (actual) and Retail sales m/m drop from 0.4% to 0.2%. Employment change has increase slightly from 1.8K to 24.0K but for Unemployment rate was still the same with previous result which was 5% only. In the short time, AUD/USD was going down from 7-12 february, you can see screenshoot below:

EUR/USD, on this currency mover for this week show fluctuate from 7-12 February, some influence factors that affect EUR such as German factory orders m/m dropped from 5.2% to -3.4%, France trade balance also dropped from -4.1B to -5.1B. In contrary, German trade balance can pump up from 11.8B to 14.0B as well as France industrial production show good sign to 0.3%. EUR/USD stand on 1.3538, the preview EUR currency mover shown below:

GBP/USD, this currency mover showed down, some factors influence are like RICS house price balance rise slightly from -39% to -31%, Trade balance dropped from -8.5B to -9.2B, manufacturing production m/m dropped from 0.6% to -0.1% and for others impact like Asset purchase facility and Official Bank Rate were the same result from previous. On 11 February, PPI input and output m/m show good result from 3.9% to 1.7% so that increase a little bit.

USD/CHF, this currency mover weekly declined, it was caused by some important factors for USD were having a good sign such as Consumer Credit, Unemployment Claim, Prelium UoM Consumer Sentiment. Even thought, USD Trade Balance was down slightly. 

 

USD/JPY, for this currency mover showed that there have no big indicator influence on this weeks, the cause of going up is because of USD good sign.

 

In conclusion, 5 major currency declined toward USD in this week. But, the screenshoot above was just in the short term means that if we look for the long term condition, 5 major currency show a good sign step by step so that trader must to consider both technical and fundamental analysis in order to take a right decision in the market place. 

Source: ForexFactory

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Dollar Strengthens as Egypt's Turmoil Boosts Haven Appeal of U.S. Assets

The dollar rose against most of its major counterparts amid speculation turmoil in Egypt will worsen, boosting demand for the safety of U.S. assets. 

The greenback headed for a third weekly gain versus the euro after Egyptian President Hosni Mubarak defied calls for his immediate resignation, agreeing only to delegate powers until a September election. Australia’s currency slid below parity with the dollar after Reserve Bank Governor Glenn Stevens said policy makers judged it “sensible” to keep interest rates on hold. U.S. consumer confidence rose this month, data showed. “Everyone is more fixated on Egypt, and it’s hurting sentiment,” said Win Thin, global head of emerging market strategy at Brown Brothers Harriman & Co. in New York. “When this risk pressure pops up, that’s when the dollar gets a bit more in favor.” 

The dollar appreciated 0.4 percent to $1.3555 per euro at 10:53 a.m. in New York, from $1.3603 yesterday, when it rallied 1 percent. The greenback has gained 0.2 percent this week against the common currency. The dollar advanced 0.1 percent to 83.35 yen. The euro declined 0.2 percent to 112.94 yen. 

The euro remained lower versus most counterparts as the German government said Bundesbank President Axel Weber will resign from his post on April 30. The decision takes him out of the race to succeed Jean-Claude Trichet as European Central Bank chief when Trichet’s term expires on Oct. 31. 

U.S. Yields Fall 

The yen pared its loss against the dollar as yields on U.S. Treasuries extended declines, damping the appeal of dollar- denominated debt. The yield on the benchmark 10-year note fell eight basis points, or 0.08 percentage point, to 3.61 percent. 

Canada’s dollar rose against all of its 16 most-traded peers as the nation unexpectedly posted its first trade surplus in 10 months and the U.S. trade deficit widened 5.9 percent to $40.6 billion, in line with forecasts. The Canadian currency gained 0.9 percent to C$1.3412 per euro. 

Sweden’s krona slid against the dollar as equities declined, with the OMX Stockholm 30 Index touching to its lowest level since Dec. 1. 

The krona depreciated as much as 1.3 percent to 6.5423 per dollar, its weakest level since Jan. 31, and headed for a weekly drop of 0.3 percent. 

IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, climbed as much as 0.6 percent to 78.697, the highest level since Jan. 21. The gauge has risen 0.5 percent this week in what would be its first five-day rally since Jan. 7.

Resort Town

Mubarak and his family left Cairo and arrived at the resort town of Sharm El-Sheikh, Al Arabiya television and the Associated Press reported without citing sources. Mubarak said yesterday he intended to stay on as president until the elections, while handing day-to-day powers to Vice President Omar Suleiman. 

Protests in Egypt, inspired by the revolt that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14, sparked concern that tension would spread in a region that holds more than 50 percent of the world’s known oil reserves. 

“The surprising events in Egypt caused a little bit of a roil in the market,” said Steve Butler, director of foreign- exchange trading in Toronto at Bank of Nova Scotia’s Scotia Capital unit. “We’ve seen the market looking for a little bit of protection and with that, flocking to the U.S. dollar.” 

Stocks were little changed after the MSCI World Index fell earlier as much as 0.5 percent and the Standard & Poor’s 500 Index dropped as much as 0.4 percent. 

The dollar was poised for a 1.4 percent weekly gain versus the yen, its biggest since Jan. 7. 

U.S. Confidence Rises 

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to 75.1, the highest level since June, from 74.2 in January, in line with the median forecast of economists in a Bloomberg News survey. 

Australia’s dollar moved below parity with its U.S. counterpart for the first time in almost two weeks, weakening for a third day, as Stevens said in parliamentary committee testimony that there was no urgency to boost borrowing costs in the first half of the year. That led traders to cut bets on the amount rates would be increased over the next 12 months. 

“Stevens is leaning toward the dovish side, and that saw the Aussie drop, with his comments taking a rate hike out of the immediate picture,” said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. 

Traders lowered their prediction for the amount of interest-rate increases by the Reserve Bank over the next 12 months to 35 basis points from 41 basis points yesterday, according to a Credit Suisse Group AG index based on swaps.

South Korean Won 

Australia’s currency fell 0.4 percent to $1.0008, from $1.0044. It dropped as much as 0.8 percent to 99.61 U.S. cents, the lowest level since Jan. 31. 

South Korea’s won decreased for a third day after the central bank kept its benchmark rate at 2.75 percent, a result predicted by only 3 of 12 economists in a Bloomberg News survey. The others forecast an increase. The currency depreciated 1.1 percent to 1,128.47 per dollar, after sliding to 1,128.70, the weakest since Jan. 11. 

Source: Bloomberg By Catarina Saraiva and Lucy Meakin 

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Gold Rises to Three-Week High Amid Escalating Tensions in Egypt

Gold rose to a three-week high as mounting tensions in Egypt spurred demand for the precious metal as an investment haven. 

Egyptian President Hosni Mubarak defied calls for his immediate resignation as thousands of protesters demanded an end to his 30-year rule. Gold headed for the third straight weekly gain after slumping 6.1 percent in January. In 2010, the price jumped 30 percent, the 10th straight annual gain. 

“All eyes are on Egypt,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The crisis turned the gold market, so gold hasn’t technically had a correction. If it becomes a bloody revolution, gold will be seen as a haven.” 

Gold futures for April delivery rose $4.30, or 0.3 percent, to $1,366.80 an ounce at 10:50 a.m. on the Comex. Earlier, the price reached $1,369.70, the highest for a most-active contract since Jan. 20. 

Silver futures for March delivery climbed 6.6 cents, or 0.2 percent, to $30.16 an ounce. 

Palladium futures for March delivery fell $1.60, or 0.2 percent, to $819.30 an ounce on the New York Mercantile Exchange. 

Platinum futures for April delivery dropped $2.20, or 0.1 percent, to $1,828.60 an ounce. 

Source: Bloomberg By Pham-Duy Nguyen 

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Bernanke says job growth, inflation still too low

(Reuters) - U.S. unemployment remains too high despite increasing signs of economic strength, Federal Reserve Chairman Ben Bernanke told Congress on Wednesday, suggesting the central bank would push on with its $600 billion stimulus program.

In testimony to the U.S. House of Representatives' Budget Committee that largely echoed a speech he delivered last week, Bernanke also warned about the dangers of unsustainable budget deficits.

He acknowledged fresh data showing a drop in the jobless rate to 9 percent in January from 9.8 percent in November, the biggest two-month drop since 1958, calling it "grounds for optimism."

However, Bernanke reiterated concern about the anemic pace of hiring.
"The job market has improved only slowly," he said, noting the economy had only made up just over 1 million of the more than 8 million jobs lost during the deepest recession in generations.

"This gain was barely sufficient to accommodate the inflow of recent graduates and other new entrants into the labor force and, therefore, not enough to significantly erode the wide margin of slack that remains in our labor market."

In November, the Fed launched a plan to buy $600 billion in government debt to keep a lid on long-term borrowing costs.

That program drew ire from many policy-makers in emerging markets, who accused the United States of unfairly driving down the value of the U.S. dollar to boost exports. At home, many Republican lawmakers in Congress attacked the program as potentially sowing the seeds of inflation.

Bernanke said inflation remains quite low in the United States, a tough message to deliver amid headlines of rising food and commodity costs across the globe.

He also said expectations of future inflation had remained "stable," suggesting little worry an inflationary psychology was building despite rising gasoline costs.

"Inflation is expected to persist below the levels that Federal Reserve policymakers have judged to be consistent" with their mandate, Bernanke repeated.

The chairman of the committee, Republican Rep. Paul Ryan of Wisconsin, took issue with that view. In his opening comments, he criticized the Fed's policies as providing the fuel for future bubbles and inflation, suggesting the Fed's bond purchases were eroding the U.S. dollar's value.

"There is nothing more insidious that a country can do to its citizens than debase its currency," Ryan said.
Bernanke was sure to be peppered with questions on both Fed policy and the budget by a Republican-led Congress that has become increasingly impatient with the Fed.

Preemptively, the Fed chairman had much the same message that he has offered repeatedly: either legislators bring the budget under control or the markets will force them into it.

"Creditors would never be willing to lend to a government with debt, relative to national income, that is rising without limit," he said. If unheeded, the adjustment could "come as a rapid and painful response to a looming or actual fiscal crisis."

Source: Reuters By Pedro da Costa and Mark Felsenthal 

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Dollar falls against euro as China raises rates

NEW YORK (AP) — The U.S. dollar fell to the euro in late trading Tuesday after China announced that it would raise rates. Investors have also become less worried about the unrest in Egypt, moving away from the dollar and looking to invest in riskier currencies.

China's central bank said Tuesday that it would raise deposit and lending interest rates by a quarter percentage point, the second time China has raised rates in over a month.

"It was expected, but the timing was unknown," said Camilla Sutton, chief currency strategist at Scotia Capital. "Investors are anticipating more interest rate hikes out of China."

The euro rose to $1.3627 late Tuesday, from $1.3591 Monday. The U.S. dollar had been gaining against the euro since late January when protests erupted on the streets of Egypt and investors were looking to invest in safe havens, such as the U.S. dollar. But investor concerns about Egypt have eased somewhat, analysts said, pushing riskier currencies higher against the dollar Tuesday.

"The situation in Egypt appears calmer," said Joseph Trevisani, the chief market analyst at FXSolutions. "The protests haven't gone away but there seems to be less intent to confront."

The U.S. dollar was also lower against most Asian and Latin American currencies Tuesday. In other trading Tuesday, the British pound fell to $1.6057 from $1.6121. The U.S. dollar rose to 0.9634 Swiss franc from 0.9552 Swiss franc, and also rose to 99.60 Canadian cents from 99.03 Canadian cents.

The U.S. currency also rose to 82.38 Japanese yen Tuesday from 82.29 Japanese yen Monday.

Source: Bloomberg By The Associated Press 

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Dollar Declines as Fed Chief Says U.S. Unemployment to Remain `Elevated'

The dollar fell for a third day against the currencies of major U.S. trade partners as Federal Reserve Chairman Ben S. Bernanke said the unemployment rate is likely to remain high “for some time.” 

The euro extended gains, rising against all of its most- traded counterparts, as Bernanke said high unemployment will persist even after the biggest two-month drop in the jobless rate since 1958, a fall to 9 percent announced last week. 

“His general tone seems to be quite dovish,” said Alan Ruskin, global head of Group-of-10 foreign-exchange strategy at Deutsche Bank AG in New York. “The market is getting used to the idea that even with the improvement in the U.S. data, the Fed’s going to be very slow to respond with tightening and therefore the dollar is not going to be that responsive to strong economic data.” 

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six trade partners including the euro and yen, fell 0.4 percent to 77.662 at 10:14 a.m. in New York. 

Source: Bloomberg By Catarina Saraiva 

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