The USD ended higher against almost all other majors, after the minutes of the US Fed latest policy meeting and the pace of the interest rate hikes boosted optimism over the strength of the country’s economy. In economic news, US manufacturing and services sector reported higher than market expectations. The labor market continued to strengthen as previous week’s initial jobless claims declined unexpectedly.
UK markets finished mixed for the week. The FTSE 100 index ended lower owing to losses in the financial and the mining sector stocks as corporate earnings were disappointing. Additionally, UK’s gross domestic product advanced at a weaker than expected rate for the last quarter of 2017, raising concerns over the nation’s economic outlook while Brexit negotiations over the trade deal find opposition rising.
The German DAX 30 climbed 0.3%, though the EUR ended lower against most other majors. Inflation of the 19 nations eased in January from December 2017 putting pressure to delay the timing of the next interest rate hike. Moreover, the region’s manufacturing and services PMI dropped more than expected and German Ifo business climate also dropped more than expected in February.
Gold prices had the worst week since early December as the dollar extended a recovery from three year lows since the Fed’s expectations were for more aggressive monetary policy. Oil prices finished their second consecutive weekly gain, after the Energy Information Administration stated that US crude oil stocks fell by 1.6 million barrels in the week ended 16 February 2018. OPEC-led production cuts also add to the positive outlook by growing optimism that rebalancing in crude markets are well underway.
Germany, Italy and the USD
Weekly Report - 26/02/2018