The trading week just ended was played mainly in the middle of it. To drag the main currencies exchange rates have been the FOMC minutes and macroeconomic information relating to the most important economies of this time: the US and EU.
The week began with the publication of the consumer price index of the United States.
The US consumer price index in April has recorded a growth of + 0.4%, against an earlier seen at + 0.1%. The annualized version reported an increase of + 1.1%, resulting higher than the previous at + 0.9%. The core version of the CPI has also seen an increase from + 0.1% to + 0.2%.
After that, it was the time of the US industrial production that exceeds the expectations marking a growth of 0.7%, compared with the decline of the previous month by 0.6%.
On Wednesday afternoon, the FOMC minutes brought the dollar to a high level, returning to establish itself as the main currencies of the markets.
According to the minutes of the meeting of the Federal Reserve in April, a majority of the members of the central bank believes that a rise in interest rates will be ‘possible’ in June (if the US economy will continue to improve).
The euro-dollar exchange rate traded around 1.1300, but after the publication of the minutes of the FOMC, EUR/USD was down rapidly at 1.1250, losing about 50 pips in a few seconds.
Also USD/CAD has been affected by the wave pro-US dollar and it has exceeded 1.30.
The rise of the USD/CAD, however, was supported by the decline in oil prices which are directly correlated with the change.
The recent difficulties experienced by the black gold prices, after the rally in the beginning of the year, led to a depreciation of the Canadian currency and a rise of USD/CAD.
Following the reports, it came one of the most important market mover ever. The numbers on initial claims for unemployment benefits in the United States recorded a total of 278.000 units during last week, thus disappointing the expectations placed at 275.000 units and down from the previous figure of 294.000 units.
As for the Eurozone, it has been announced the annualized consumer price index of last month that was stable at -0.2% as expected and in line with the previous year. The consumer price index in the core version is worsened to -0.3% last month compared to the previous figure seen at -0.1%.
On a monthly basis, the Eurozone inflation has not shown any signs of growth resulting rather flat at 0% against the 1.2% recorded in March.
A few hours after the disclosure of the minutes of the FOMC, they were published the minutes of the ECB of last meeting (April). It showed the European Central Bank’s cautiously optimistic about the Eurozone economic conditions, confirming the orientation of President Mario Draghi held at the time of the press conference.
The ECB reiterates its commitment to pursuing the inflation target close to 2% with no delays. However, he continues to worry about the mismatch between the expected inflation and the price of oil.
Last but not least, the exchange rate US dollar-Australian dollar continues its fall after the maximum set exactly one month ago over 0.78.
The recent cut in interest rates by the Reserve Bank of Australia reduced the economic scenario of the country and it launched the depreciation of the local currency.
Adding to the difficulties of growing inflation already noted by the RBA, there were the data provided by the Australian Bureau of Statistics (ABS) about the growth of wages. For the first quarter of 2016 the wage level has marked a + 0.4%, below market expectations of + 0.5% and setting a new quarterly record negative since September 1998.