US dollar slightly down amid expectations for rate hike -- NBK

KUWAIT, Feb 26 (KUNAS) -- The US dollar ended the week on a slightly softer tone with markets expectations for a rate hike were unchanged on the week, the National Bank of Kuwait (NBK) has said.
Although many Fed speakers have intensified their rhetoric over the need to raise interest rates soon, investors seem far from convinced on the timing of the next fed rate hike, especially with comments from outgoing Atlanta Fed President Lockhart not really helping in describing 'soon' as in the next three meetings, the NBK latest report added on Sunday.
On the fiscal front, as too much hope were priced into markets, investors have started realizing the limited scope of actions that will deployed in fiscal year 2017 by the new US administration and the limited fiscal stimulus effects in 2017 on the overall economy, report noted.
On the other side of the ocean, European politics remain in a rollercoaster with Marine Le Pen's advisors meeting with some banks to explain their plans to withdraw France from the Euro if she is to become President.
According to the NBK report, after being under pressure the majority of the week, the Euro slightly recovered by the end of the week as the improved outlook for Macron following the decision by Bayrou not to run helped the candidate and removed the mounting election polls pressure.
The pace of Eurozone economic growth improved markedly to hit a near six-year high in February. Job creation was the best seen for nine and a half years, order book growth picked up and business optimism moved higher, all boding well for the recovery to maintain strong momentum in coming months.
Inflationary pressures meanwhile continued to intensify. Eurozone PMI registered 56.0 in February, according to the preliminary 'flash' estimate. Up from 54.4 in January, the latest reading was the highest since April 2011.
As for the UK, estimates for the British GDP increased by 0.7 percent between the third and fourth Quarter of 2016, revised up 0.1 percent from the preliminary estimate of GDP published in January.
The UK GDP growth in the fourth quarter of 2016 saw a continuation of strong consumer spending in line with the Retail Sales Index for the fourth quarter, which grew by 1.2 percent. Strong growth in the services sector was also noticeable in consumer-focused industries. In Asia, the NBK said that Japan's exports rose in January at a slower pace than the previous month due to a decline in shipments to the US and China due to the Lunar New Year holidays.
In addition, concerns about growing trade protectionism casted doubts over the outlook. Exports in January rose 1.3 percent from the same period a year ago, less than the median estimate for a 4.7 percent annual increase and slower than a 5.4 percent year-on-year increase in December. (end) fnk.amh.msa