Weak US economic data drags USD lower

Thursday, April 16, 2015

Global equity markets reversed and posted renewed losses in today’s trading session as disappointing economic data weigh on market sentiment and limited risk appetite. In Europe, the CAC, DAX, IBEX and London equity benchmark index retreated between 0.4% and 1.7% amid ongoing concerns regarding Greece’s economic stability with an upcoming deadline next week.

In the US, modest economic data weighed on sentiment. The Dow Jones retreated towards $18,000 and the S&P 500 and NASDAQ indices slid lower over 0.20%. US housing starts rose slightly by 2% m/m in March missing analysts’ estimates of a 15.9% increase. Building permits declined sharply by 5.7% m/m in March versus estimates of a 1.9% drop. Furthermore, we received fairly disappointing employment data as weekly jobless claims rose to 294,000 last week from 280,000 initially expected.

USD index plunges below 98.00

DXY Curncy (DOLLAR INDEX SPOT)   2015-04-16 16-03-01

The US dollar came under renewed pressure with the USD index retreating sharply below 98.00 against a basket of currencies. The euro rebounded above 1.07 against the USD, while investors’ attention continues to be in Greece’s debt issues for the short-term.

EUR rebounds above 1.07   

EURUSD Curncy (EUR-USD X-RATE)   2015-04-16 16-01-24 

The softer USD provided support to base metal prices which rebounded strongly in today’s trading session. Copper surged almost 2% towards $6,100 and aluminium extended gains above $1,800. However, precious metals remained under pressure as gold remained below the key level of $1,200/ounce and silver hovered around $16.0. 

More from: Myrto Sokou