KUWAIT, April 20 (KUNA) -- Mixed performance in the FX market last week, as major currencies gained against the US Dollar, after Fed Chair Janet Yellen seemed dovish during her speech last Wednesday, an economic report showed here on Sunday.
The Federal Reserve Chairman stated that the central bank would keep interest rates low, even when the economy recovers, adding that "the length of time the Federal Reserve keeps its key interest rate near zero will depend on how far the US economy remains from the central bank's employment and inflation goals, and how long it will likely take to meet them," said the report released by the National Bank of Kuwait (NBK).
The US dollar fell against most major currencies following the dovish remarks by Janet Yellen, but following better than expected economic data, the greenback recouped some of its losses in the FX markets, it said.
The Euro started the week at 1.3885, gaining only slightly, only to drop significantly after ECB President Mario Draghi, said that "a further appreciation of the currency would trigger more monetary stimulus".
The single currency fell to touch a low of 1.3791. The EUR started to regain from its drop, pushing higher ahead of Fed Chair speech. Following Yellen's conference, the Euro hiked against a weaker US Dollar to touch a high 1.3865, only to erase those gains after better than expected data surfaced in the United States. The single currency ended the week at 1.3813.
In Europe, the United Kingdoms' unemployment rate unexpectedly dropped to a 5-year low in February, emphasizing the strength of the economic recovery and raising the prospect of an interest rate hike sooner than previously signaled by the Bank of England, the report said.
The jobless rate dropped more than economists forecasted to 6.9% in the three months through February, from 7.2 percent in the three month through January. Expectations were set for a decline to 7.1 percent. A factor behind the latest plunge in unemployment was a jump in the number of self-employed people, which hit a record high, the report said.
The Bank of England said in last August that it would start thinking about raising the record low interest rates, when the unemployment rate reaches 7 percent. After the unemployment rate started to race towards that level, the Bank of England updated its forward guidance, it added. Moreover, jobless claims fell by 30,400 in March versus 37,000 the previous month, the 17th consecutive drop that was larger than forecasted. Additionally wage growth accelerated to 1.7 percent, matching the inflation rate in February, it added. (end) mfa.mt