The United States dollar continued to enhance its position versus a number of world currencies after the outcome of the failed EU summit on financial issues, as well as versus the background of good fundamental statistics on the American economy.
The other day afternoon, a report on the US labor market was released, in addition to agents of the Federal Reserve System, who once again spoke of the need to additional increase interest rates, which had a positive result on investor belief.
According to the US Department of Labor, the variety of Americans who sent brand-new applications for welfare last week has declined. In spite of this, the lack of skilled workers is still quite high.
Thus, the number of initial claims for welfare for the week from October 7 to 13 reduced by 5,000 and amounted to 210,000, while economic experts also anticipated that the variety of applications would be 210,000.
The speech of the President of the Federal Reserve Bank of St. Louis, James Bullard, caused an increase in the United States dollar. Bullard stated that the strong economic characteristics justifies the increase in interest rates, which he opposed for a long time.
Despite this, the situation in the economy might change at any time, and these changes will be unfavorable. Even if the economy surpasses financial experts’ projections, the Fed needs to report to the marketplaces about future rate hikes.
The speech of the Vice Chairman of the Fed Quarles also benefited the US dollar, as he confirmed the current rate of the Fed to a progressive policy change due to the truth that the economy is still in good condition.
Quarles drew attention to the truth that it is extremely challenging to say whether it will be possible to keep strong economic development. In his viewpoint, there is some prospective for increasing the share of the economically active population.
As for the economic crisis, then, in the viewpoint of the Fed representative, there is little proof of dangers, and the criticism of US President Donald Trump with respect to the Fed will not avoid him from doing his job.
Today, there was data on the economy of China, whose growth has actually slowed to the level of the start of the monetary crisis.
According to the report of the National Bureau of Statistics, China’s GDP in the 3rd quarter of this year grew by 6.5% compared with the same duration last year, versus a development of 6.7% in the 2nd quarter. Financial experts had anticipated a 6.6% increase in GDP in the 3rd quarter. Regardless of the slowdown, the target levels set by the authorities in the region of 6.5% have actually been achieved.The downturn in industrial production will have a negative influence on financial development in the future, despite the fact that growth in financial investment and retail sales has stabilized.According to the Bureau of Stats, in September of
this year, compared to the exact same period last year, commercial production grew by 5.8 %after rising by 6.1%in August. Economic experts had anticipated annual commercial growth to be 6.0 %. Investments for the period from January to September rose by 5.4%, which ended up being greater than the projections of economists, who anticipated development of 5.3 %. Retail sales in September increased 9.2%after rising 9.0%in August. Financial experts had actually forecast growth of 9.1%. The product has been supplied by InstaForex Company- www.instaforex.com