KUWAIT, Oct 31 (KUNA) -- The foreign exchange market witnessed some volatility last week with the US Dollar ending the week on a relatively weaker footing against a basket of currencies ahead of the much-awaited Federal Reserve decision on quantitative easing this week, according to the Weekly Money Market Report of the National Bank of Kuwait (NBK) issued here Sunday.
The Euro range traded between a high of USD 1.4080 and low of 1.3730 before closing the week at USD 1.3947.
The Sterling traded at a low of USD 1.5665 earlier during the week and reached a high of USD 1.6045. The Pound benefited from a surprisingly strong economic growth data and a revision by "Standard and Poor's" on the UK economic outlook from "negative" to "stable." The Japanese Yen closed the week at a 15-year high against the US Dollar trading around 80.40 before reaching 81.98 earlier in the week, hiking expectations of an intervention by the Bank of Japan. The Swiss Franc traded in a narrow range between 0.9700 and 0.9930.
Regarding the US GDP, the report said the US economic growth edged up as predicted in the third quarter but not enough to chip away a high unemployment or change expectations of more monetary easing from the Federal Reserve next week.
GDP expanded at a two percent annual rate as consumer spending climbed at its fastest pace in four years, higher than the 1.7 percent in the second quarter.
The housing market in the US showed some signs of recovery but remained at depressed levels pointing to a painful and prolonged recovery. The sales of the previously-owned homes rose a greater-than-expected 10 percent to 4.53 million units. In parallel, sales of newly built US single-family homes rose faster than expected for a second month in a row, according to the report.
The new claims for US unemployment benefits unexpectedly fell to a three-month low last week but still pointed to labor market stagnation.
Initial claims for unemployment aid dropped 21,000 to 434,000 against market expectations of a hike to 453,000. The four-week average of new jobless claims, a better measure of underlying labor market trends, fell 5,500 to 453, 250, but remained in the same range seen for much of this year.
The US durable goods orders increased 3.3 percent in September, the largest gain since January. New orders for long lasting US manufactured goods rose more than expected last month as bookings for civilian aircraft surged, but fell when transportation equipment were excluded.
The Institute for Supply Management-Chicago Inc. said its business barometer rose to 60.6 this month from 60.4 a month earlier. Finally, the University of Michigan Consumer sentiment decreased to 67.7 from 68.2 in September.
As for Europe, the report said the unemployment in the Euro zone rose to 10.
1 percent in September from a downward-revised 10 percent in August, despite a fall in the number of jobless in Germany, the euro zone's largest economy, and Spain the country with the highest unemployment rate in the European Union.
The Euro zone's consumer prices rose more than expected this month, but remained below the European Central Bank's price stability target of two percent. Consumer prices in the 16 countries using the Euro rose 1.9 percent in October year-on-year, against 1.8 percent in September.
The British economy grew twice as fast as expected in the third quarter, dimming the chance of more quantitative easing from the Bank of England in the near term.
The economy grew 0.8 percent between July and September, higher than markets expectations of a hike to 0.4 percent mainly due to the construction sector.
On a yearly basis, GDP grew by 2.8 percent, the fastest annual rate in three years and up from 1.7 percent in the previous quarter, the NBK report noted.
However, overall growth is still expected to slow throughout the year as government spending cuts continue to weigh, value-added tax rises and the rebound in construction activity is likely to wane, it expected. - Kuna