Was the dollar’s growth fake or is USD gathering strength for a sharp rise?

Trading 14 Jan 2021 Commentaire »

analytics6000774b6e295.jpg

Risk appetite is weak, the news does not bring new drivers for directional movement in world markets, investors have taken a wait-and-see attitude. Focus is on Federal Reserve Chairman Jerome Powell's speech, who will comment on the prospects for changing the quantitative easing program. President-elect Joseph Biden announces an anti-crisis package. It should be worth $2 trillion.

The emergence of details on anti-crisis measures may increase volatility in the markets, since the degree of uncertainty in this topic is still high. Optimism will intensify, but given that it is already extremely high, a backlash from investors is not excluded. Fixation of positions is possible. The likelihood of such a scenario will increase if market players find the new president's plan unconvincing.

Overall, the expected financial support from the government is a positive factor for the US economy. However, investors fear that the implementation of this plan could lead to higher inflation, which in the long term will trigger an earlier than expected tightening of the Fed's monetary policy.

The dollar grew on Thursday against a basket of competitors. The rate has been in the upper border of the descending channel for the last four months. This time, in contrast to the beginning of the week, the recovery of the dollar index was observed along with an increase in risk appetite.

Yields on 10-year government bonds climbed to 1.11% at the beginning of the day. However, they still remain below the week's high - 1.18%.

The rise in the securities market and the decline in bond prices are slightly at odds with the dollar's dynamics. In such cases, the pressure on the US currency often increases. This means that investors need to decide which instrument's dynamics they will perceive as an indicator of a stable trend.

Updating the US index's weekly high could be a hint of the end of the short-term trend on the financial markets. With this scenario development, a deeper correction is possible, and a return to growth is not excluded. The closest targets for the dollar index would be 91.2 and 92.0. However, the greenback strengthened the downward dynamics against its main competitors during the US session.

analytics6000d1d488d84.jpg

For the main pair on the forex market, the 1.207 level is a similar target for a pullback. The EUR/USD pair may leave the area below the 20th figure. As soon as the euro appears at the 1.20-1.19 level, it will give investors a reason to reconsider their extremely negative attitude towards the dollar. But this is unlikely to happen, just look at the dynamics of individual currencies, for example, the pound.

The GBP/USD pair remains close to local highs. Of course, there is support from the Bank of England, which made it clear that it is not yet ready to resort to negative rates. A more important role is played by the attitude to risk. If the pound manages to maintain its positions near recent peaks, then nothing threatens risk appetite.

The pound grew on Thursday and is preparing to test the resistance of 1.37. The news background is on its side.

analytics6000d1d7e2019.jpg

The pound is under pressure due to the situation with the coronavirus in the UK. However, news from the US, contributing to the depreciation of the dollar, neutralizes this negative. Thus, buyers' attack on the next round mark of 1.38 is not excluded.

The material has been provided by InstaForex Company - www.instaforex.com

Oil price forecast for January and February 2021

Trading 14 Jan 2021 Commentaire »

Hello, dear colleagues.

Despite the New Year holidays, the most important events in the financial markets occur almost every day. It would seem that there is nothing that could shock a trader who is exhausted by the continuous flow of news, but the markets are always ready to give us an unexpected surprise. In this sense, oil has always been one of the most unpredictable assets. Moreover, it is so unpredictable that, as a rule, analytical institutions engaged in oil market research adjust their forecasts almost monthly, and it is good if they are slightly wrong, but more often they generally fall into the sky.

Last week's OPEC meeting was supposed to be a normal meeting, but something happened that could not have been expected. Saudi Arabia decided to voluntarily reduce its production by 1 million barrels per day, which caused the #CL oil price to soar to the $54 level, and now we face questions: how long will the positive dynamics continue and will the price of WTI oil reach the level of $55 and stay there for a long time? The Brent grade of oil is interesting, the price of which is about $5 higher than the price of WTI grade, but in general, the analysis for both grades of oil is similar. Therefore, in this article I will consider the North American grade, but the conclusions drawn will be valid for the North Sea grade of oil.

analytics6000707f0df98.jpg

The main source of data for me has long been the US Energy Information Agency (US EIA), which, on Wednesday, January 13, published its next short-term forecast, where interesting conclusions are made:

The EIA predicts that spot prices for Brent crude oil will average $53 per barrel in 2021 and 2022, compared with an average of $42 per barrel in 2020.

The EIA estimates that global oil and liquid fuel consumption averaged 92.2 million barrels per day during 2020, down 9.0 million barrels per day from 2019. The EIA expects global liquid fuel consumption to grow by 5.6 million barrels per day in 2021 and another 3.3 million barrels per day in 2022.

The EIA predicts that crude oil production in the Organization of the Exporting Countries (OPEC) in 2021 will average 27.2 million barrels per day, compared with 25.6 million barrels per day last year. The projected growth reflects OPEC's announced increase in volumes and continued production growth in Libya.

At the same time, take note that a month earlier, in December 2020, the Agency's forecast was much less optimistic. For example, the spot price of WTI crude oil in the first quarter of this year was assumed at $44.50. In the current forecast for the first quarter, the spot price of WTI is assumed to be at $52.69. A similar situation is predicted for the Brent brand, where the base level of average prices increased from $47 to $55.69 dollars per barrel.

This was partly due to a reduction in the forecast of global oil production in the first and fourth quarters of 2021, to levels of 93.66 and 99.11 million barrels per day. According to the EIA, daily oil production will average 97.24 million barrels this year. While global consumption, despite the fact that its forecast was also lowered, will be 97.78 million barrels per day. Thus, thanks to the OPEC+ deal and the voluntary reduction of production by Saudi Arabia, there will be a shortage in the oil market throughout the current year.

analytics6000709115c33.jpg

Figure 1: The balance of supply and demand in the oil market.

Yes, you heard right, there is a deficit in the oil market, not a surplus. The oil deficit will be felt especially significantly in the first quarter of this year, when the market will lack 2.27 million barrels of oil every day (Fig. 1). Therefore, it can be assumed that from a fundamental point of view, despite the blockages associated with COVID-19, oil can still reach $55 for WTI grade and $60 for Brent grade, but whether the price will settle at these values raises some questions.

The January forecast from the US EIA assumes that spot prices for WTI grades in the first half of the year will be at an average of $51, which is slightly below the current price of $52.65 per barrel (Fig. 2). In the second half of the year, prices may drop even lower, which implies an average price of WTI in 2021 at $ 49.75.

analytics600070b95d15b.jpg

Figure 2: US EIA WTI Forecast

Thus, taking into account the current dynamics of oil and the forecasts of the US EIA, oil now looks somewhat overbought, which means that it can be assumed that the oil price will return to average values, which for the WTI grade indicates a decrease to the $50 level, and for the Brent grade, a return to the $55 level. However, take note that in the short-term dynamics, the oil price may continue to rise along the trend, which means that, without sufficient technical and fundamental grounds, traders should not count on a quick return to the average values and open positions against the existing upward trend. Be cautious and careful, follow the money management rules.

The material has been provided by InstaForex Company - www.instaforex.com

USD/JPY. Kuroda’s pessimism, closed Japan and fiscal stimulus expectations

Trading 14 Jan 2021 Commentaire »

The Bank of Japan will hold its very first meeting for the year on January 21. According to most analysts, the Japanese central bank will keep all the parameters of monetary policy in the same form, despite the worsening epidemiological situation in the country. At the same time, BOJ Governor Haruhiko Kuroda warned that this issue remains open. According to him, the central bank is ready to take additional steps to ease monetary policy "without hesitation" - if necessary. And although Kuroda repeats this phrase with enviable regularity, the yen's position has faltered once again. Kuroda voiced a rather pessimistic rhetoric, making it clear that the central bank will keep the previous accommodation rate and low interest rate.

However, internal fundamental factors influence the dynamics of the Japanese currency. The yen focuses primarily on the external fundamental background, which determines the level of general demand for protective instruments. The USD/JPY pair collapsed to the middle of the 102nd figure following the high-profile events in the US capital, but later buyers seized the initiative. Firstly, the political battles in the US have become predictable, and secondly, traders of the pair succumbed to the strengthening of the dollar, which is growing against the background of rising Treasury yields, in anticipation of large-scale fiscal stimuli.

analytics60006efa64145.jpg

The so-called coronavirus factor acts locally. If at the beginning of 2020, traders tracked the dynamics of the spread of COVID-19 around the world, responding to constantly updated anti-records, then at the moment the impact of the coronavirus has been, so to speak, "localized". For example, yesterday the yen slipped on reports that an emergency regime was introduced in four more prefectures in Japan. The regime will now affect 11 of the 47 prefectures, where more than half of the country's population lives. In fact, we are talking about a lockdown with all the ensuing consequences - including for the national economy. In addition, the Japanese have completely closed themselves off from foreigners. Japan isolated itself at the end of December, but businessmen from 11 countries with which business agreements were in force could still get into the country. We are talking about businessmen and business delegations from countries and regions of Asia, including China, South Korea, Thailand, Vietnam, Singapore and Malaysia. Now they were also banned from entering - at least until February 7th. According to Johns Hopkins University, Japan has 302,000 COVID-19 cases (out of a population of 125 million). More than 4,000 people have died from coronavirus complications.

Against the background of new quarantine restrictions, there are rumors that the BOJ will ease monetary policy next week. These rumors intensified after Kuroda's speech, who said that "the country's economy is in a difficult situation." At the same time, he repeated the phrase that the central bank "will not hesitate" to take additional policy easing measures if the BOJ members come to the conclusion that such measures are necessary. Obviously, we are talking about expanding the incentive program. The Japanese central bank may also lower its target for long-term interest rates and step up asset purchases, while accelerating the pace of expansion of the monetary base. It is possible that such options will be combined.

In other words, the yen does not have its own arguments for growth. Therefore, USD/JPY traders will primarily focus on the dollar's behavior. Which, in turn, is waiting for additional fiscal stimulus. Today, the American media, citing anonymous sources in the Biden team, reported that the amount of additional assistance could be increased to $2 trillion. Such prospects keep the greenback afloat - also against the yen. According to preliminary information, the expansion of the rescue package will be announced this week – through the mouth of Janet Yellen or Joe Biden.

Given the decline in anti-risk sentiment, the general strengthening of the dollar and the BOJ's intention to further weaken the ultra-accommodative policy, medium-term growth prospects open up for buyers of USD/JPY.

From a technical point of view, the pair also retains the potential for succeeding growth – at least to the upper line of the Bollinger Bands indicator on the daily chart, which coincides with the lower boundary of the Kumo cloud and corresponds to the price mark of 104.40. In addition, if the Tenkan-sen and Kijun-sen lines on D1 intersect (and they are very close to this), the Ichimoku indicator will form a Golden Cross signal, warning of a trend change. This fact will open the way to the next resistance level of 104.70 (the lower limit of the Kumo cloud on the same timeframe). However, for such a breakthrough, an appropriate information guide is needed, which, obviously, will be associated with the expansion of the package of additional assistance to the US economy.

The material has been provided by InstaForex Company - www.instaforex.com

ECB Policymakers Concerned Pandemic Second Wave Would Prolong Crisis, Minutes Show

Trading 14 Jan 2021 Commentaire »

European Central Bank policymakers were concerned that the resurgence in the coronavirus pandemic that has led to restoration of lockdown in several countries could prolong the economic crisis, minutes of the latest policy session showed on Thursday. "Members considered that the impact of positive news regarding the availability of vaccines on the medium-term outlook needed to be weighed against the impact of the more negative latest news on infection rates and containment measures in the short term," the minutes, which the ECB calls 'account', of the December 9-10 Governing Council meeting showed.

Policymakers pointed out that the expected shape of the recovery now looked very different from the V- and U-shapes expected earlier in the year. "It was possible that given the more positive starting point, the second wave of the pandemic would not make the crisis deeper as a whole, but would make it more drawn out than previously anticipated," the minutes said. Rate-setters assessed that a protracted curtailment of activity might inflict more lasting damage on a number of sectors, with heightened risks of rising insolvencies and unemployment. This could in turn affect the medium-term outlook for the euro area economy and more protracted scarring effects owing to the delay in the recovery. Countries such as Germany and France had imposed partial lockdowns in December as the coronavirus, or Covid-19, cases surged. Exceptionally high uncertainty persisted surrounding the growth and inflation outlook in Eurozone and that positive sentiment could erode fast in the face of negative news, the minutes said. Policymakers also drew attention to the exchange rate in relation to the inflation outlook. They pointed out that the nominal effective exchange rate currently stood at an all-time high and that the recent appreciation could contribute significantly to the subdued inflation outlook. They raised concerns over risks related to developments in the exchange rate that might have negative consequences for the inflation outlook.

All members agreed on the need for a downward revision in the projected inflation path and additional monetary policy measures, the minutes showed.

In December, the the ECB increased the size of its pandemic emergency purchase programme, or PEPP, by EUR 500 billion to a total of EUR 1,850 billion. Some policymakers sought a more moderate increase in the PEPP envelope on the argument that significant space for purchases was still available from past decisions. They also pointed out the need for "keeping some powder dry" by maintaining the option to further adjust the envelope in the future, in an environment of high uncertainty.

Others proposed a larger increase in the PEPP envelope saying the current boost was insufficient to ease financing conditions further and bring inflation closer to the Governing Council's aim. Further, the additional envelope of EUR 120 billion for the asset purchase program would have been exhausted by the end of 2020.

"By extending and partly increasing the level of monetary policy accommodation until early 2022, there is very little the ECB can and would want to do," ING economist Carsten Brzeski said.

The economist said only two factors could trigger new ECB action in the coming months: a further rapid strengthening of the euro and an unexpected surge in inflation expectations in financial markets. The next ECB rate-setting session is scheduled for January 21.


The material has been provided by InstaForex Company - www.instaforex.com

Analytics and trading signals for beginners. How to trade GBP/USD on January 15. Analysis of Thursday’s trade. Getting ready

Trading 14 Jan 2021 Commentaire »

1-hour chart of GBP/USD

analytics60008c721f576.jpg

On Thursday, January 14, GBP/USD made three attempts to resume the uptrend after a correction to 1.3618. As a result, GBP/USD rebounded three times off this level. The MACD indicator formed three buy signals, each of them was strong. All signals are pinpointed by circles in the picture. Despite their strength, GBP/USD was trading rather sideways than with a clear-cut trend. Thus, the first buy signal could have brought beginners a 12-pips loss. The second one could have brought a 19-pips loss. The third signal has gained a 38-pips profit. In other words, if beginners opened all three trades, now they have gained a minor profit. The final buy signal has not been cancelled yet as the indicator still points upwards. However, the level of 1.3702 is being worked upon now with a higher high but a failed attempt to continue the upward move. This prompts an idea about a possible new downward correction. On the whole, I expect a further upward move, but I don't rule out a correctional decline at night. Nevertheless, I would recommend keeping long positions until the MACD indicator reverses downwards.

Fundamentally, the sterling is still not influenced by any catalysts. The economic calendar is nearly empty for the UK. The US released a series of economic reports but all of them are of little importance to market participants. Let me warn beginners that the fundamental background and macroeconomic data have been recently neglected by the market. So, technical analysis is of major importance now. Interestingly, political news makes no difference to market sentiment. Read about what's going on in the US just to be aware of the latest developments.

Tomorrow, on January 15, the UK is due release some interesting reports. So is the US. The question is whether market participants will pay any attention to them. If no, GBP/USD will continue moving following its logic. Nevertheless, don't miss the UK GDP data for November. The UK national output is expected to log a 4.6% contraction that will confirm grave headwinds in the British economy. Other economic data will be less important, though it makes sense to get to know data on the UK industrial production and the US retail sales.

The following scenarios are possible on January 15

1)Long positions on GBP/USD are still gainful at present because the price has left the downward channel. Thus, it is recommended to keep long positions with targets at 1.3737 and 1.3775 until MACD reverses downwards. Besides, beginners could try close long positions right now without extending positions overnight. New long positions can be opened after the MAD indicator generates a new buy signal.

2)Selling the pair is getting a bad idea. Now it would be better to wait for a new bearish move or a completion of the current uptrend to trade the pair downwards again. The situation will hardly change until the morning. The third bounce off 1.3702 could trigger a downward move, but it would be trade against the trend.

What's on the chart:

Support and Resistance levels are the levels that are targets when opening buy or sell orders. Take Profit levels can be placed near them.

Red lines are channels or trend lines that display the current trend and show which direction it is preferable to trade now.

Up / down arrows show whether the pair should be traded up or down when reaching or overcoming particular obstacles.

MACD indicator (10,20,3) - a histogram and a signal line. When they are crossed, this signals a market entry. It is recommended for use in combination with trend lines (channels, trend lines).

Important speeches and reports in the economic calendar can greatly influence the movement of the currency pair. Therefore, during their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

The material has been provided by InstaForex Company - www.instaforex.com

Euro Slides As ECB Minutes Show Members Cautioned About Currency Exchange Rate

Trading 14 Jan 2021 Commentaire »

The euro fell against its major opponents in the European session on Thursday, after minutes from the European Central Bank's December meeting showed that policymakers expressed concerns over the recent appreciation of the domestic currency that could have an adverse impact on the inflation outlook.

The incoming data indicated a more pronounced near-term impact of the pandemic on economic activity and inflation than previously envisaged, the minutes from the bank's December 9 and 10 showed.

Members broadly agreed that additional monetary policy measures were necessary to preserve favorable financing conditions over the pandemic period.

There was broad agreement with regard to the monetary policy package, which expands and extends the PEPP purchases and recalibrates the TLTRO III conditions so as to underpin economic activity and safeguard medium-term price stability, it showed.

Policymakers argued that the focus on preserving favourable financing conditions implied a move away from a constant monthly pace of purchases towards adjusting the pace according to market conditions, with a view to preventing a tightening of financing conditions inconsistent with countering the downward impact of the pandemic on the projected path of inflation.

Members believed that the expected shape of the recovery now looked very different from the V- and U-shapes expected earlier in the year.

"It was felt that a protracted curtailment of activity might inflict more lasting damage on a number of sectors, with heightened risks of rising insolvencies and unemployment affecting the medium-term outlook and more protracted scarring effects owing to the delay in the recovery," the minutes showed.

The currency was further weighed by a stronger dollar, as the U.S. treasury yields jumped on expectations of a large U.S. stimulus package from the Democratic-led U.S. government.

President-elect Joe Biden is due to outline his proposals for massive fiscal stimulus at 7:15 pm ET.

Data from Destatis showed that the German economy contracted the most since the 2008-2009 global financial crisis in 2020, but most likely avoided a double-dip in the fourth quarter of the year, underpinned by the better performance of the manufacturing sector.

Gross domestic product fell 5 percent in 2020, in contrast to the 0.6 percent rise seen in 2019. This was the first contraction in ten years.

The currency traded mixed against its major counterparts in the Asian session. While it fell against the greenback and the franc, it held steady against the pound. Versus the yen, it climbed.

The euro shed 0.4 percent to hit near a 5-week low of 1.2111 against the greenback. The pair was worth 1.2157 when it closed deals on Wednesday. Should the euro falls further, it is likely to test support around the 1.20 region.

The euro touched its lowest level since November 23 against the pound, at 0.8874. The EUR/GBP pair had ended yesterday's trading session at 0.8911. The euro is seen finding support around the 0.86 mark.

The single currency fell 0.2 percent against the yen, touching a 9-day low of 126.07. The pair had closed Wednesday's deals at 126.27. Next near term support for the euro is likely seen around the 123 level.

The Bank of Japan upgraded its economic assessment of three out of nine regions and downgraded one, according to the latest Regional Economic Report.

Many regions, while noting that their economy had been in a severe situation due to the impact of the novel coronavirus, there were signs of picking up.

The euro was down against the loonie and the kiwi, reaching over a 2-month low of 1.5358 and a 6-day low of 1.6847, respectively. The currency had closed Wednesday's trading at 1.5435 versus the loonie and 1.6931 versus the kiwi. Immediate support for the euro is likely seen around 1.52 against the loonie and 1.66 versus the kiwi.

The European currency dipped to 1.5631 against the aussie, a level not seen since December 2018. The euro-aussie pair had finished deals at 1.5718 on Wednesday. Further fall in the currency may challenge support around the 1.54 level.

Data from the Australian Bureau of Statistics showed that Australia building approvals advanced a seasonally adjusted 2.6 percent on month in November - coming in at 17,205.

That was in line with expectations following the 3.8 percent increase in October.

The euro eased off to 1.0781 against the franc, not far from a fresh 4-week low of 1.0779 seen at 2:45 am ET. At Wednesday's close, the pair was worth 1.0788. The euro is likely to test support around the 1.06 region, if it falls again.


The material has been provided by InstaForex Company - www.instaforex.com

Analytics and trading signals for beginners. How to trade EUR/USD on January 15. Analysis of Thursday’s trade. Getting ready

Trading 14 Jan 2021 Commentaire »

1-hour chart of EUR/USD

analytics600086401de31.jpg

On Thursday, EUR/USD has reversed downwards a few times, trying to develop a steady bearish trend. Nevertheless, the MACD indicator failed to ebb away to zero. So, sell signals which have been formed during the trading day were weak, so they should not have been used for trading. Anyway, everything is for the better because EUR/USD was moving like a seesaw with sharp gyrations. The pair was able to hit lower lows of 2021 and maintained the overall downtrend. The price has been trapped inside a downward channel. Thus, the best idea for beginners is to wait until a strong sell signal appears in the chart. I insist that it is better to refrain from opening positions than to incur losses. Caution is highly recommended now when fundamental background and macroeconomic data are still neglected by the market. Let me warn you that EUR/USD could resume an upward move anytime because market participants are still poised to be bearish about the US dollar.

On Thursday, January 14, the US Labor Department reported on initial unemployment claims. The number of first-time jobless claims increased more than expected last week that is bad for the US economy. Interestingly, the number of unemployment claims contracted for a few weeks in a row, but the US dollar extended weakness. I mean that EUR/USD's climb in the second half of the trading day is not related to a weekly update on initial jobless claims. Other news was of secondary importance to market participants. Jerome Powell did not say anything extraordinary like Christine Lagarde did earlier this week. Besides, political news makes a minor impact on Forex. The news on Donald Trump's impeachment did not explode like a bombshell.

On Friday, January 15, the US is due to report some economic data. I guess the market will also take little notice of them as it happens recently. Anyway, investors will get to know data on industrial production which is not so vulnerable amid the pandemic-driven crisis. Another report is about retail sales. Retail sales are expected to inch down in December. Industrial production could show an uptick last month. In other words, these minor changes are likely to be ignored by the market. Hence, traders will give priority to technical analysis.

The following scenarios are possible on January 15

1)Long positions are still out of the question nowadays as EUR/USD is set to follow the downtrend. Those who want to buy the currency pair should wait until the price fixes above the downward channel. In this case, it will be possible to consider long positions with upward targets at resistance levels of 1.2206 and 1.2256.

2)Now it makes sense to trade the pair downwards. So, it would be better to wait until a new clear-cut sell signal appears. It is recommended to open new short positions with targets at support levels of 1.2123 and 1.2090 (they will be revised in the morning) on condition that MACD generates a new sell signal, but previously the MACD indicator should drop to zero. Another sell signal should be viewed as a bounce off the upper border of the new downward channel.

What's on the chart:

Support and Resistance levels are the levels that are targets when opening buy or sell orders. Take Profit levels can be placed near them.

Red lines are channels or trend lines that display the current trend and show which direction it is preferable to trade now.

Up / down arrows show whether the pair should be traded up or down when reaching or overcoming particular obstacles.

MACD indicator (10,20,3) - a histogram and a signal line. When they are crossed, this signals a market entry. It is recommended for use in combination with trend lines (channels, trend lines).

Important speeches and reports in the economic calendar can greatly influence the movement of the currency pair. Therefore, during their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

The material has been provided by InstaForex Company - www.instaforex.com

U.S. Import And Export Prices Jump More Than Expected In December

Trading 14 Jan 2021 Commentaire »

A report released by the Labor Department on Thursday showed U.S. import and export prices both increased by more than expected in the month of December.

The Labor Department said import prices climbed by 0.9 percent in December after edging up by a revised 0.2 percent in November.

Economists had expected import prices to rise by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.

Prices for fuel imports led the way higher, spiking by 7.8 percent in December after surging up by 4.8 percent in November. Rising petroleum prices more than offset lower natural gas prices.

Excluding fuel imports, import prices rose by 0.4 percent in December after dipping by 0.2 percent in the previous month.

Higher prices for non-fuel industrial supplies and materials and consumer goods more than offset declining foods, feeds, and beverages prices.

The report said export prices also jumped by 1.1 percent in December following a revised 0.7 percent advance in November.

Export prices were expected to climb by 0.5 percent compared to the 0.6 percent increase originally reported for the previous month.

Prices for agricultural exports surged up by 1.3 percent in December after rising by 0.3 percent in November. Higher prices for soybeans more than offset declining prices for vegetables and dairy products.

The Labor Department said prices for non-agricultural exports also rose by 0.6 percent in December after spiking by 3.5 percent in November. Prices for non-agricultural industrial supplies and materials led the way higher.

Despite the monthly increase, import prices in December were down by 0.3 percent compared to the same month a year ago. Export prices were up by 0.2 percent year-over-year.

"Recovering fuel costs may raise import prices in the near term, but still-weak global growth will keep imported inflation subdued across 2021," said James Watson, Senior U.S. Economist at Oxford Economics.


The material has been provided by InstaForex Company - www.instaforex.com

U.S. Weekly Jobless Claims Climb To Highest In Over Four Months

Trading 14 Jan 2021 Commentaire »

First-time claims for U.S. unemployment benefits climbed by much more than expected in the week ended January 9th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims rose to 965,000, an increase of 181,000 from the previous week's revised level of 784,000.

Economists had expected jobless claims to inch up to 795,000 from the 787,000 originally reported for the previous week.

With the bigger than expected increase, jobless claims reached their highest level since hitting 1.011 million in the week ended August 22nd.

"Some of the rise in claims was likely due to the addition of $300 in weekly top-off benefits," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. "Not all individuals eligible for unemployment assistance actually claim benefits, and the supplementary payments add an incentive to file for benefits."

She added, "While prospects for the economy later in 2021 are upbeat, the labor market recovery has taken a step backward and we expect claims to remain elevated with the risk that they rise from last week's levels."

The Labor Department said the less volatile four-week moving average edged up to 834,250, an increase of 18,250 from the previous week's revised average of 816,000.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also rose by 199,000 to 5.271 million in the week ended January 2nd.

The four-week moving average of continuing claims still fell by 5,215,750, a decrease of 59,000 from the previous week's unrevised average of 5,274,750.

Last Friday, the Labor Department released a separate report unexpectedly showing a decrease in U.S. employment in the month of December.

The Labor Department said non-farm payroll employment fell by 140,000 jobs in December after climbing by an upwardly revised 336,000 jobs in November.

The decline surprised economists, who had expected employment to increase by about 71,000 jobs compared to the addition of 245,000 jobs originally reported for the previous month.

Employment decreased for the first time since April as the recent surge in coronavirus cases led to a nosedive in employment in the leisure and hospitality sector, which lost 498,000 jobs.

Private education employment also declined, while the job losses were partially offset by gains in professional and business services, retail trade, and construction.

Meanwhile, the report said the unemployment rate came in at 6.7 percent in December, unchanged from November. Economists had expected the unemployment rate to inch up to 6.8 percent.


The material has been provided by InstaForex Company - www.instaforex.com

U.S. Import And Export Prices Increase More Than Expected In December

Trading 14 Jan 2021 Commentaire »

A report released by the Labor Department on Thursday showed U.S. import and export prices both increased by more than expected in the month of December.

The Labor Department said import prices climbed by 0.9 percent in December after edging up by a revised 0.2 percent in November.

Economists had expected import prices to rise by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.

The report said export prices also jumped by 1.1 percent in December following a revised 0.7 percent advance in November.

Export prices were expected to climb by 0.5 percent compared to the 0.6 percent increase originally reported for the previous month.


The material has been provided by InstaForex Company - www.instaforex.com