WASHINGTON (dpa-AFX) - The release of the Fed's Beige Book Wednesday afternoon is currently having little impact on the movements of the dollar. The buck is turning in a mixed performance at present, rising slightly against the Euro and the pound sterling, but falling against the Japanese Yen.
Reports from the twelve Federal Reserve Districts suggest national economic activity continued to expand during the reporting period from late August to early October, according to the Fed's Beige Book.
Most Districts indicated a modest or moderate pace of expansion; however, the New York District reported no change in overall activity.
Most Districts characterized input costs and/or output prices as fairly flat, but prices increased slightly on net, another sign of inflation.
Employment expanded at a modest pace over the reporting period, but layoffs in the manufacturing sector were noted in the New York, Philadelphia, Cleveland, and Richmond Districts.
Signs of stabilization in the oil and gas sector continued, with U.S. oil rig counts having risen sharply in recent months.
Suggesting weakness in the housing market, the Commerce Department released a report on Wednesday showing that new residential construction in the U.S. unexpectedly tumbled to its lowest level in well over a year in September.
The report said housing starts plunged by 9.0 percent to an annual rate of 1.047 million in September after slumping by 5.6 percent to a revised 1.150 million in August. The continued decline came as a surprise to economists, who had expected housing starts to climb to a rate of 1.180 million from the 1.142 million originally reported for the previous month.
Meanwhile, the Commerce Department also said building permits surged up by 6.3 percent to an annual rate of 1.225 million in September after rising by 0.7 percent to a revised 1.152 million in August. Building permits, an indicator of future housing demand, had been expected to increase to 1.165 million from the 1.139 million that had been reported for the previous month.
Traders will be paying close attention to tomorrow's policy decision by the European Central Bank. Investors are waiting to see whether the ECB will continue to buy €80 billion a month of mainly government bonds until at least March.
The dollar has climbed to around $1.0965 against the Euro Wednesday afternoon, from an early low of $1.1004.
Eurozone construction output declined for the first time in five months in August, Eurostat reported Wednesday. Construction output contracted 0.9 percent month-over-month in August, reversing a 1.5 percent gain in the previous month.
The buck has risen to around $1.2270 against the pound sterling this afternoon, from an early low of $1.2330.
The U.K. unemployment rate remained unchanged at a near 11-year low in the three months to August, signaling the resilience of the British labor market to the shock 'Brexit' vote in June. The ILO jobless rate was 4.9 percent, where it has been since the three months to May, data from the Office for National Statistics showed Wednesday. The figure was in line with economists' expectations.
British households' finance outlook worsened in October on higher inflation expectations, while their financial pressures intensified to the strongest level in five months, results of a survey by IHS Markit and financial information provider Ipsos Mori revealed Wednesday.
The seasonally adjusted Household Finance Index, or HFI, dropped to 43.8 in October from 44.7 in September.
The greenback dropped to a 1-week low of Y103.159 against the Japanese Yen, but has since rebounded to around Y103.370.
Japan's all industry activity expanded for the third straight month in August, the Ministry of Economy, Trade and Industry showed Wednesday. The all industry activity index grew 0.2 percent on a monthly basis in August, the same rate as registered in July and matched economists' expectations.
Copyright RTT News/dpa-AFX