Friday, 14 October 2005
Printer Friendly | Email Article | RSS
Written by Richard Lee, Currency Analyst
Rising earlier on, the USDCHF currency pair declined on the session after disappointing consumer price inflation data for the world’s largest economy was released. After hitting the intraday high of 1.2943, the currency pair now trades at 1.2823, below the 1.2890 close of yesterday’s session late in New York. Key economic data anticipated by the market surprised to the downside today with consumer prices and confidence reports on the docket along with data on industrial production. For the month of September, inflationary pressures increased 1.2 percent on the headline figure. However, excluding the volatile food and energy components, underlying inflation remains relatively tame as the lower core figure confirmed the contributions of rising energy prices on the overall figure. Additionally, advance retail sales rose 0.2 percent in the month of September. However, excluding a tumble in auto sales, the core retail figure rose 1.1 percent, additionally reflective of higher oil prices. Separately, industrial production for the world’s largest economy dipped 1.3 percent against a consensus 0.4 percent dip with consumer confidence mildly shaken, down to a 75.4 reading from the previous 76.9.
Stocks on Wall Street were generally higher after General Electric reported strong profit growth for the quarter and smaller inflationary pressures alleviated interest rate considerations, albeit momentarily. The Dow Jones Industrial Average rose 0.2 percent to 10,239.80 while the S&P 500 index added 0.4 percent to 1,181.03. Subsequently, the Nasdaq composite was higher by 0.2 percent at 2,051.75. Rising 15 percent, quarterly profits for General Electric rose on higher demand for its wide array of products along with a stake in a mortgage and life insurance company. As a result, investors bid shares higher by 1 percent to $34.36.
Fixed income markets fell for the fourth consecutive day as traders witnessed inflation rise the most in 25 years on climbing energy prices. As a result, spurred by further interest rate hike considerations, the 10-year benchmark note rose 5 basis points to 4.52 percent as the face value fell $5 to 97 37/32.