Slovakia GDP Falls Most Since 1996

Trading 04 sept 2020 Commentaire »

Slovakia's economy shrank at the fastest pace in over two decades and entered a recession in the second quarter of this year, due to the impact of the coronavirus, or Covid-19, pandemic, latest figures from the Statistical Office of the Slovak Republic showed on Friday.

Gross domestic product decreased a seasonally adjusted 12.1 percent year-on-year, which was the biggest decline since 1996, the statistical office said. The flash estimate released earlier was confirmed.

This was also the worst performance since the second quarter of 2009, during the global financial crisis, when GDP fell 6 percent.

In the first quarter, the economy contracted 3.8 percent.

Two consecutive quarters of GDP decline qualifies as a technical recession. On a non-adjusted basis, GDP fell 12.1 percent annually after a 3.7 percent decline in the first three months of the year.

Most sectors of the economy recorded declines with industry, arts, entertainment and recreation, and other activities logging falls of more than 20 percent.

Double-digit declines were recorded in construction, trade, transportation and storage, accommodation and food service, and information and communication activities. Value added grew in financial and insurance activities and in the real estate sector.

External demand dropped 26.8 percent and imports fell 27 percent. Domestic demand shrunk by 12.1 percent led by a 32.3 percent slump in investments. Consumption decreased 5.7 percent. Compared to the previous quarter, GDP decreased a seasonally adjusted 8.3 percent in the second quarter after a 5.2 percent slump in the previous three months.

Employment fell 2.5 percent year-on-year, which was the biggest fall since 2010. Unemployment grew by 14.7 percent year-on-year, which was the largest gain since 2010.

The jobless rate rose to 6.6 percent, the highest level since the second quarter of 2018.


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Dollar Appreciates As U.S. Jobless Rate Falls Sharply

Trading 04 sept 2020 Commentaire »

The U.S. dollar moved up against its major counterparts in the European session on Friday, after a data showed that the nation's employment continued to rebound in August, while the unemployment rate fell, signaling an improvement in the labor market from the coronavirus crisis.

Data from the Labor Department showed that non-farm payroll employment surged up by 1.371 million jobs in August compared to economist estimates for a jump of about 1.400 million jobs.

The report also showed the spike in employment in July was downwardly revised to 1.734 million jobs from the previously reported 1.763 million jobs.

The unemployment rate dropped to 8.4 percent in August from 10.2 percent in July, while economists had expected the rate to dip to 9.8 percent.

Recently, U.S. House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin agreed for stop-gap funding to avert a government shutdown at the end of the month.

The deal would extend government funding despite ongoing conflicts over stimulus relief package.

The currency held steady against its major rivals in the Asian session, except the pound.

The greenback registered a 0.5 percent gain against the pound to hit a 1-week high of 1.3210. The GBP/USD pair had ended yesterday's trading session at 1.3280. Further rally in the currency may challenge resistance around the 1.28 region.

Survey results from IHS Markit showed that the UK construction sector growth moderated in August from a near five-year high largely due to the lack of new work to replace completed contracts.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index fell unexpectedly to 54.6 in August from 58.1 in July.

The USD/CHF pair gained 0.5 percent, touching 0.9137. The pair was quoted at 0.9093 at yesterday's close. The greenback is likely to locate resistance around the 0.94 region.

The greenback was higher by 0.4 percent against the euro, at 1.1802. The pair was worth 1.1851 when it closed deals on Thursday. Should the currency rallies again, 1.16 is possibly seen as its next resistance level.

Data from Destatis showed that German factory orders growth moderated more than expected in July.

Factory orders increased 2.8 percent on a monthly basis, much slower than the 28.8 percent rise in June and economists' forecast of 5 percent.

The greenback added 0.4 percent to 106.48 against the yen, after having dropped to 106.06 at 7:15 pm ET. The pair had finished Thursday's deals at 106.18. Next near term resistance for the greenback is found around the 108.00 level.

The U.S. currency reached as high as 0.6688 against the kiwi, setting a 1-week high. This marked a 0.3 percent gain from yesterday's closing value of 0.6711. The greenback may face resistance around the 0.63 region.

The greenback spiked up to an 8-day high of 0.7241 against the aussie, up by 0.8 percent from a low of 0.7296 seen at 6:00 am ET. The greenback was worth 0.7272 per aussie at Thursday's New York session close. Extension of the greenback's uptrend may lead it to a resistance around the 0.70 region.

Data from the Australian Bureau of Statistics showed that Australia retail sales advanced a seasonally adjusted 3.2 percent on month in July.

That was shy of expectations for an increase of 3.3 percent and was up from 2.7 percent in the previous month.

After falling to 1.3078 at 8:15 am ET, the greenback rebounded modestly versus the loonie and was trading at 1.3130. At yesterday's close, the greenback was quoted at 1.3127 against the loonie. Immediate resistance for the dollar is likely seen around the 1.34 level.


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U.S. Job Growth Slows But Unemployment Rate Drops More Than Expected

Trading 04 sept 2020 Commentaire »

A closely watched report released by the Labor Department on Friday showed another substantial increase in U.S. employment in the month of August, although the pace of job growth continued to slow from the record spike seen in June.

The Labor Department said non-farm payroll employment surged up by 1.371 million jobs in August after spiking by a downwardly revised 1.734 million jobs in July and soaring by 4.781 million jobs in June.

Economists had expected employment to jump by about 1.400 million jobs compared to the addition of 1.763 million jobs originally reported for the previous month.

The strong job growth in August was partly due to the hiring of 238,000 temporary 2020 Census workers, which contributed to a significant increase in government employment.

"Census hiring could rise further in September but, as in previous Census years, those workers will be let go again over the following months," said Andrew Hunter, Senior U.S. Economist at Capital Economics. "Nevertheless, there were also solid increases in employment across most of the private sector."

The Labor Department cited notable job growth in retail trade, professional and business services, leisure and hospitality, and education and health services.

The continued job growth contributed to a much bigger than expected drop in the unemployment rate, which fell to 8.4 percent in August from 10.2 percent in July. Economists had expected the unemployment rate to edge down to 9.8 percent.

The notable decrease in the unemployment rate came as the household survey found employment spiked by 3.756 million in August, far outpacing a 968,000 person increase in the size of the labor force.

The unemployment rate continued to decline from the post-World War II record high of 13.5 percent in April but remains well above the 50-year low of 3.5 percent seen late last year.

Meanwhile, the report said average hourly employee earnings rose $0.11 or 0.4 percent to $29.47 in August from $29.36 in July. Annual wage growth was unchanged at 4.7 percent.

"Employment growth is still set to lag the recovery in broader economic activity over the coming months given its greater exposure to the services sectors worst affected by the pandemic," Hunter said.

He added, "Nevertheless, the August data illustrate that, despite the earlier surge in virus cases and more recent fading of fiscal support, the recovery continues to plough on."


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BoE's Saunders Says Additional Stimulus Probably Required To Lift Inflation

Trading 04 sept 2020 Commentaire »

Additional monetary policy easing would be required to bring inflation to the target, Bank of England Monetary Policy Committee Member Michael Saunders said Friday.

"I consider it quite likely that additional monetary easing will be appropriate in order to achieve a sustained return of inflation to the 2% target," he said in an online webinar.

"There is no automatic time limit on our willingness to maintain a loose monetary policy stance," he said.

At the August MPC meeting, the BoE had forecast inflation to turn briefly negative in the near term, falling to -0.3 percent in August driven by VAT cut and 'Eat Out to Help Out' scheme.

Saunders said the BoE does not intend to tighten policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2 percent inflation target sustainably.

Further, he said the faster-than-expected rebound in the economy over the last few months has reflected a benign window in which large fiscal support has coincided with the relaxation of lockdown measures and low infection rates. "This window may now be closing," he said.

A downside scenario to the economy would be very costly, the banker added.


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*U.S. Dollar Gains To 1.3247 Against Pound

Trading 04 sept 2020 Commentaire »

U.S. Dollar Gains To 1.3247 Against Pound


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*U.S. Dollar Rise To 1.1818 Against Euro, 0.9123 Against Franc

Trading 04 sept 2020 Commentaire »

U.S. Dollar Rise To 1.1818 Against Euro, 0.9123 Against Franc


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*Dollar Firms To 106.43 Against Yen After U.S. Jobs Data

Trading 04 sept 2020 Commentaire »

Dollar Firms To 106.43 Against Yen After U.S. Jobs Data


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U.S. Employment Jumps Slightly Less Than Expected In August

Trading 04 sept 2020 Commentaire »

A closely watched report released by the Labor Department on Friday showed employment in the U.S. jumped by slightly less than expected in the month of August.

The Labor Department said non-farm payroll employment surged up by 1.371 million jobs in August compared to economist estimates for a jump of about 1.400 million jobs.

The report also showed the spike in employment in July was downwardly revised to 1.734 million jobs from the previously reported 1.763 million jobs.

Meanwhile, the Labor Department said the unemployment rate dropped to 8.4 percent in August from 10.2 percent in July, while economists had expected the rate to dip to 9.8 percent.


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Loonie Little Changed After Canada Jobs Data

Trading 04 sept 2020 Commentaire »

Statistics Canada has released Canada jobs data for August at 8:30 am ET Friday.

The loonie changed little against its major counterparts following the data.

The loonie was trading at 0.9519 against the aussie, 81.20 against the yen, 1.5505 against the euro and 1.3097 against the greenback around 8:33 am ET.


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Dollar Advances After U.S. Jobs Data

Trading 04 sept 2020 Commentaire »

Following the release of the U.S Labor Department's non-farm payrolls data for August at 8:30 am ET Friday, the greenback strengthened against its major counterparts.

The greenback was trading at 106.29 against the yen, 0.9111 against the franc, 1.3270 against the pound and 1.1845 against the pound around 8:31 am ET.


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