Foreign Exchange Market Update

April 26, 2024

United States (U.S.): Consumer Prices Rise in Line with Estimates in March

Closely watched readings on inflation released by the Commerce Department showed consumer prices in the U.S. increased in line with economist estimates in March. The Commerce Department said its consumer price index rose by 0.3% in March, matching the increase seen in February as well as economist estimates. Excluding food and energy prices, core consumer prices also climbed by 0.3% for the second straight month, in line with expectations. Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.7% in March from 2.5% in February. Economists had expected the pace of growth to tick up to 2.6%. The annual rate of growth by core consumer prices in March came unchanged from February at 2.8%, while economists had expected the pace of growth to slow to 2.6%. The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending in March. The report said personal income climbed by 0.5% in March after rising by 0.3% in February, while personal spending advanced by 0.8% for the second straight month. 04/26/2024 - 08:39:00 (RTTNews)

European Union (E.U.): Eurozone Private Sector Credit Growth Remains Weak

Euro traded at 1.0687 against USD at 9:00 am PST.

Eurozone private sector credit continued to increase in March but the pace of recovery remained weak, data from the European Central Bank showed. Claims in the private sector increased 0.8% yearly, which was slightly faster than the 0.7% increase in February. The adjusted loans to the private sector also grew 0.8% following February's 0.7% increase. Among the borrowing sectors, annual growth in adjusted loans to households eased to 0.2% from 0.3%. By contrast, loans to non-financial corporations grew at a faster rate of 0.4 after a 0.3% rise. Further, data showed that the broad monetary aggregate M3 advanced 0.9% in March, faster than the 0.4% rise in February. At the same time, the narrow measure, M1 posted an annual fall of 6.7% after a 7.8% decrease. ING economist Bert Colijn said March data shows a subdued recovery in bank lending and money growth. With inflation expectations falling further, today's data is in line with a start to cautious rate cuts. 04/26/2024 - 06:49:00 (RTTNews)

Japan: BoJ Keeps Key Interest Rate Near Zero

Japanese Yen traded at 157.41 against USD at 9:00 am PST.

The Bank of Japan left its key interest rate unchanged near zero and the bank's latest projections showed the underlying inflation staying around 2% further damped expectations for aggressive tightening in the future. The BoJ policy board, headed by Governor Kazuo Ueda, unanimously decided to hold the overnight interest rate at around 0 to 0.1%. The board also voted to conduct its bond purchase program in line with the decision made at the March meeting. In March, the BoJ raised its interest rates for the first time in 17 years and became the world's last central bank to end negative rates amid signs that inflation is strengthening. The central bank had also decided to end its yield curve control, or YCC, a policy that capped the interest on the 10-year Japanese government bonds, or JGBs, around zero. In the Outlook for Economic Activity and Prices report released alongside the policy announcement on Friday, the bank said inflation is set to rise through fiscal 2025 driven by the rise in crude oil prices and the waning of the effects of the government's economic measures. The bank upgraded its inflation outlook for the fiscal 2024 to 2.8% from 2.4%. Likewise, the projection inflation excluding food for the fiscal 2025 was lifted to 1.9% from 1.8%. Inflation is seen at 1.9% in the fiscal 2026. However, the projections showed the core inflation figure that excludes fresh food and energy staying around 2% during the forecast horizon. Risks to prices are skewed to the upside for fiscal 2024 but are generally balanced thereafter, the bank said. At the same time, the bank lowered its growth projection for the fiscal 2024 to 0.8% from 1.2% citing lower private consumption. 04/26/2024 - 04:59:00 (RTTNews)