Dollar ends mixed after vote on Trump health care bill is delayed: March 24, 2017

Market Review - 23/03/2017   21:58GMT  

Dollar ends mixed after vote on Trump health care bill is delayed

The greenback remained little changed on Thursday ahead of a vote on Republican healthcare plans, which will be seen as a test for President Trump's ability to deliver on his tax and spending promises. However, late in the day, the House decided to take the vote count on Friday and dollar moved narrowly. 

Versus the Japanese yen, despite rebounding to session high at 111.58 in Asian morning, dollar met renewed selling there and dropped to 110.91 in European morning, then lower to a fresh 4-month trough at 110.63 in New York morning on news of a delay in the vote together with release of poor U.S. jobless claims. However, price pared its losses and staged a recovery to 111.30 near midday and moved narrowly. 

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 18 increased by 15,000 to a seasonally adjusted 258,000 from the previous week's total of 243,000 which had been revised from an initial reading of 241,000. Analysts had expected jobless claims to drop by 1,000 from the original reading to 240,000 last week. 

Although the single currency rebounded to session high at 1.0805 ahead of European open, price pared its gains and dropped sharply to an intra-day low at 1.0769 in European morning due partly to cross-selling of euro especially vs sterling. Later, the pair found some support there and staged a rebound to 1.0795 ahead of New York open before trading sideways. 

The British pound traded with a firm bias and gained to 1.2517 ahead of European open. Despite a brief but sharp retreat to 1.2461 in European morning due to comments from BoE's Broadbent, cable jumped to 1.2528 in European morning on the back of upbeat UK retail sales data. Price later edged higher to a fresh 4-week high of 1.2531 in New York afternoon. 

U.K. Office for National Statistics said that retail sales increased 1.4% in February from the prior month, compared to the previous decline of 0.5% which was revised from a previous drop of 0.3%. Analysts had expected February's reading to rise by 0.4%. 

Year-on-year, retail sales increased 3.7% last month, compared to forecasts for growth of 2.6% and January's 1.0% advance which was revised from the initial reading of a 1.5% gain. 

In other news, BoE's Broadbent said 'UK exports in sweet spot right now, benefitting fm weak sterling n unchanged trading rules; exporters' sweet spot unlikely to last indefinitely, making investment decisions tricky; weak pound probably reflects mkt judgement supply side of UK economy likle yo weaken fm Brexit; weak pound big incentive for investment in UK tradeable sector, but caution understandable too; companies likely already tempering investment decisions because of uncertainty; we may already be seeing the impact of squeeze on retail spending; MPC has no particular expectation of forthcoming Brexit negotiation.' 

On the data front, European Commission said that Euro zone consumer confidence fell to an annual rate of -5.0, from -6.0 in the preceding month. Analysts had expected Euro zone consumer confidence to fall -5.7 last month. 

Data to be released on Friday: 

New Zealand trade data; Japan manufacturing PMI, leading economic index, France GDP, manufacturing PMI, services PMI, Germany manufacturing PMI, services PMI, Italy trade balance, EU manufacturing PMI, services PMI, UK mortgage approvals, U.S. durable goods, manufacturing PMI, services PMI and Canada CPI.