Major currencies are buoyed in the market today following yesterday’s positive Fed comments. Market support has helped the Australian dollar, notably, rise to 1.0668 – the highest level in almost 3 months. Other US economic data has helped demand for other currencies besides the dollar, with the Euro recovering as well to 1.3150. All in all, with little other economic data scheduled for the session, it looks as though it may be a rather lackluster Thursday session.
- Federal Reserve officials yesterday kept interest rates at the current 0.25% standing. In addition, policymakers noted that employment gains have not been up to par, adding to concern that another round of monetary stimulus may be needed in order to boost economic growth. As a result, the monetary body has elected to keep rates low till at least through 2014 – in addition to considering further stimulus measures.
- The Reserve Bank of New Zealand decided to keep rates unchanged at 2.5% in their scheduled meeting last night. According to central bankers, “it remains prudent to keep the official cash rate on hold at 2.5%” given the volatility and uncertainty in the market and moderate growth at home. As a result, speculation has grown that the RBNZ is likely to push back their timely rate hike – which was forecasted to happen in mid-2012.
- US durable goods orders surged by 3% in the month of December, and higher than market expectations of 2%. The Commerce Department figure showed gains supported by an increase in non-defense transportation and machinery – along with upticks in business capital spending.
- Job growth cooled a bit in the week, according to Labor Department figures today. According to the weekly jobless claims report, the amount of first time claimers for unemployment benefits rose by 21,000 to 377,000 in the week ending January 21st. Surprisingly, the four week moving average fell to 377,500 from 380,000 last week – presenting a silver lining to the rather disappointing report.
- South Korea’s gross domestic product rose less than anticipated and the least in the last two years in the fourth quarter of 2011 – led by waning orders in European countries. For the record, fourth quarter GDP gained by 0.4% to an annualized figure of 3.4%. The quarter over quarter pace was disappointing considering the third quarter’s 0.8% pace of expansion.
- According to meeting minutes of Brazil’s central bank, President Tombini and fellow board members noted a high likelihood that benchmark interest rates will drop below 10% in the near term even as inflation remains relatively elevated in one of Latin America’s fastest growing economies. The expectations are built on forecasts for a lack of expansion in the coming quarters for the Brazilian economy.
