The dollar increased after the minutes from the Federal Open Market Committee. The US currency was also supported by the release of the weekly data on unemployment claims. The zloty declined after two days of gains.
The numbers on unemployment claims were better than the forecast. It dropped to 281k – a slightly lower result than the 283k projected. Moreover, the four week average dropped to the lowest level in fifteen years.
Given the report, the expansion in the labor market – in spite of the release on the situation in the labor market (in March the employment growth stood at 126k – clearly a worse result than the 244k projected) – it is still very strong.
Today's report was released at a crucial moment. On one hand, the Federal Open Market Committee minutes were rather dovish (more on the issue in our morning commentary). Given the data from the labor market, the situation may force the Fed to postpone interest rate hikes. Moreover, the Fed members pointed at a strong dollar and its negative impact on the export growth as the factors that undermine the GDP expansion.
On the other hand, the New York Fed president, William Dudley, said on Tuesday that the recent data on employment change was not very important as the numbers have been disrupted by the weather conditions. Moreover, Dudley said that June remains an appropriate moment for the rate hikes. The statement coupled with today's data have paved the way for a stronger dollar.
Greece has six days
The Greek paper, Kathimerini, informed that the nation has six working days to prepare the final reform plan. The Eurogroup will decide whether Athens will receive the final disbursement of aid on April 24.
The position of the Prime Minister Alexis Tsipras has been deteriorated as his visit to Moscow was not very successful. Russia is not willing to provide support to the troubled country as its impact on the course of the European Union politics towards Russia is not meaningful. The Greek government may get some money from Moscow, if the gas pipeline investment plan is put into motion. This is, however, in the distant future, thus it will not improve Athens’ financial position in the nearest term.
There is some good news from Athens, however. The nation paid the 450 million euro bill to the IMF. This shows that the Syriza government is softening its stance and will be more prone to break a final deal with Troika.
After two days of gains, the zloty gave away some of its gains. The Polish currency dropped against all its major pairs. The EUR/PLN returned from the lowest level since 2011.
Today's zloty move is rather a correction. The Polish currency is in a position to extend gains due to the fact that the sentiment towards risk assets is positive.