The dollar is little changed against its major European rivals Wednesday afternoon, following yesterday’s slide. However, the buck is weakening in comparison to the Japanese Yen as geopolitical concerns and uncertainty over the implementation of President Trump’s policy agenda has made investors more risk averse.
Investors remain concerned about the fate of the Republican plan to repeal and replace Obamacare ahead of an anticipated vote on Thursday. Trump has suggested the GOP cannot move forward with tax reform plans until lawmakers keep the promise to repeal and replace Obamacare.
On a light day for economic data, existing home sales in the U.S. saw a sharp pullback in the month of February, according to a report released by the National Association of Realtors on Wednesday.
NAR said existing home sales tumbled by 3.7 percent to an annual rate of 5.48 million in February after jumping by 3.3 percent to a rate of 5.69 million in January. Economists had expected sales to drop to 5.58 million.
The dollar has slipped back to around $1.08 against the Euro Wednesday afternoon, from an early high of $1.0775.
The euro area current account surplus declined to a 15-month low in January, the European Central Bank said Wednesday. The current account surplus fell to EUR 24.1 billion in January from EUR 30.8 billion in December. This was the lowest since October 2015, when the surplus totaled EUR 23.4 billion.
The leading index for France, which measures the future economic activity, increased for the sixth successive month in January, survey figures from the Conference Board showed Tuesday. The Conference Board leading economic index climbed 0.4 percent in January, following a 0.2 percent increase in December.
Britain-based banks that want to shift to anywhere in Europe may get an expedited entry, though with conditions attached, and there will not be any relaxation of standards, European Central Bank Executive Board member and Vice-Chair for Banking Supervision Sabine Lautenschlager said Wednesday.
In the event of a “hard” Brexit, the UK will become a “third country” for the European Union, which means the British banks would lose their European passport and access to the Single Market, Lautenschlager said.
Many of the 40 UK banking groups would have to apply for a banking license in an EU country to regain the passport, which are granted by the ECB. Applying for a banking license in the EU is a lengthy process.
The buck reached a high of $1.2417 against the pound sterling Wednesday, but has since retreated to around $1.2480.
British households’ financial outlook worsened to the weakest level in more than three years in March on sharp inflation expectations, while their financial pressures intensified to the strongest level since late-2014, results of a survey by IHS Markit and financial information provider Ipsos Mori revealed Wednesday.
The seasonally adjusted Household Finance Index, or HFI came in at 43.2 in March, which was one of the weakest readings seen over the past two years.
Members of the Bank of Japan’s monetary policy board stated that the country’s economic recovery is continuing at a moderate pace, minutes from the bank’s meeting on January 30 and 31 revealed on Wednesday.
“Exports had picked up, mainly led by automobile-related exports to advanced economies and IT-related ones to emerging economies in Asia, with the effects of the slowdown in emerging economies diminishing. They would likely continue their pick-up trend for the time being,” the minutes said.
The greenback has tumbled to a 4-month low of Y110.835 against the Japanese Yen this afternoon, from an early high of Y111.769.
Japan posted a merchandise trade surplus of 813.389 billion yen in February, the Ministry of Finance said on Wednesday. That surpassed expectations for 807.2 billion yen following the downwardly revised 1,087.9 billion yen deficit in January.
Japan’s all industry activity recovered in January driven by the construction sector, data from the Ministry of Economy, Trade and Industry showed Wednesday. The all industry activity index rose 0.1 percent in January from December, when it dropped 0.2 percent. Economists had forecast the indicator to remain flat in January.
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