Monthly Archives: August 2018

India’s GDP Growth Exceeds Expectations

India’s economy grew more than expected in the June quarter, data from the Central Statistics Office showed Friday.

Gross domestic product grew 8.2 percent year-on-year in the June quarter compared to 5.6 percent expansion in the same period of last year. Economists had forecast an expansion of 7.6 percent.

Gross value added during April to June period climbed 8 percent versus 5.6 percent in the previous year.

The annual 8 percent increase in GVA was largely driven by a 13.5 percent rise in manufacturing. Construction advanced 8.7 percent and and farm output grew 5.3 percent.

Meanwhile, mining and quarrying rose only 0.1 percent.

The Ministry of Commerce and Industry reported that combined output of eight core industries grew 6.6 percent in July from last year, following June’s 7.6 percent expansion. Cumulative growth for April to July came in at 5.8 percent.

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Czech Q2 GDP Growth Revised Up

The Czech Republic’s economy in the second quarter grew more than estimated initially estimated, latest data from the statistical office showed Friday.

Gross domestic product grew 0.7 percent quarter-on-quarter, which was faster than the 0.5 percent initial estimate released on August 14.

The economy expanded 0.5 percent in the first quarter and 0.7 percent in the final quarter of 2017.

On a year-on-year basis, GDP rose 2.4 percent in the second quarter, which was faster than the 2.3 percent reported earlier.

The pace of growth slowed from 4.1 percent in the first quarter and was the weakest since the fourth quarter of 2016, when it was 1.8 percent.

Investment expenditure and household consumption were the main growth factors of the Czech economy, the statistical office said.

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Loonie Little Changed After Canada Industrial Product Price Index

At 8:30 am ET Friday, Statistics Canada has released Canada industrial product price index for July.

Following the data, the loonie changed little against its major rivals.

The loonie was trading at 84.92 against the yen, 1.5196 against the euro, 0.9425 against the aussie and 1.3041 against the greenback around 8:32 am ET.

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Loonie Slides Ahead Of Canada Industrial Product Price Index

At 8:30 am ET Friday, Statistics Canada will release Canada industrial product price index for July.

Ahead of the data, the loonie fell against its major rivals.

The loonie was worth 84.91 against the yen, 1.5194 against the euro, 0.9425 against the aussie and 1.3041 against the greenback as of 8:25 am ET.

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Eurozone Inflation Slows Unexpectedly; Jobless Rate Lowest Since 2008

Eurozone inflation slowed unexpectedly on oil prices in August, but remained above the target amid the central bank’s plan to eventually end asset purchases by the year end.

The unemployment rate in the 19-nation currency bloc held steady at the lowest since November 2008, official data showed Friday.

Inflation eased to 2 percent from 2.1 percent in July, according to flash data from Eurostat. The annual rate was expected to remain at 2.1 percent, which was the highest since December 2012.

The European Central Bank targets “below, but close to 2 percent” inflation.

Core inflation that excludes energy, food, alcohol and tobacco, slowed marginally to 1 percent in August from 1.1 percent a month ago.

August’s small decline in Eurozone inflation won’t deter the ECB from ending its net asset purchases this year, Jack Allen, an economist at Capital Economics, said.

But core inflation is still not on a sustained upward trend, so the bank will be in no hurry to raise interest rates. The economist expects the first hike to come next September at the earliest.

Bert Colijn, an ING economist, said headline inflation will slip below target in the months ahead.

The ECB needs improved core inflation to stay on track for its conditional path towards the end of quantitative easing in December and a rate hike at the end of summer 2019, Colijn noted.

Among the big-four economies, Germany’s EU harmonized inflation slowed to 1.9 percent from 2.1 percent in July. Likewise, Spain’s inflation came in at 2.2 percent, down from 2.3 percent a month ago.

Italy’s inflation slowed to 1.7 percent from 1.9 percent. Meanwhile, France’s inflation remained unchanged at 2.6 percent.

In a separate communique, Eurostat said the jobless rate stood at 8.2 percent, the same rate as seen in June, and in line with expectations, but down from 9.1 percent in July 2017. This was the lowest rate recorded in the region since November 2008.

The number of unemployed decreased by 73,000 from June to 13.381 million. Compared to the previous year, unemployment fell by 1.368 million.

The jobless rate among youth aged below 25, dropped to 16.6 percent in July from 16.8 percent in June.

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Indian Rupee In Free-fall Against U.S. Dollar

The Indian rupee remained lower against the U.S. dollar on Friday, after plunging to a lifetime low yesterday on higher crude oil prices and consistent outflow of foreign funds from the domestic equity market.

The rupee breached the 71-mark against the dollar and was trading at 71.05. Yesterday, the currency had plunged to an all-time low of 71.21 against the greenback.

So far this year, the rupee has fallen almost 11.8 percent against the U.S. dollar.

The persistent fall in the rupee is due to domestic dollar demand from oil importers, as well as weak global cues stemming from U.S.-China trade tensions.

U.S. President Donald Trump in an interview with Bloomberg News said the U.S. intends to move ahead with plans to impose tariffs on $200 billion in Chinese imports as early as next week.

Trump also threatened to pull out from the World Trade Organization and called European trade policies “almost as bad as China,” raising fresh worries over trade friction.

Besides the rupee, the cautious mood resulted in weakness in emerging market currencies such as Argentina’s peso, Brazilian real and the Turkish lira.

Earlier in the week, Indian Economic Affairs Secretary Subhash Chandra Garg had remarked that the depreciation in the rupee was due to some small mismatch in the demand and supply and the currency was fairly stable at current levels.

Indian markets were mixed, with the benchmark BSE Sensex ending down 45.03 points or 0.12 percent at 38,645.07, while the broader Nifty index closed marginally higher at 11,680.50.

Investors await the release of India’s GDP data for the April-June quarter after market hours for more direction.

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