Dollar Strength Resonates On Positive US Data
ICM Brokers | Jul 31, 2014 03:43AM ET
EUR/USD
The euro fell to fresh eight-month lows against the U.S. dollar on Wednesday, falling below the 1.34 level, after data showed that the U.S. economy rebounded strongly in the second quarter. The Commerce Department reported that gross domestic product expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 0.3%. The contraction in the first quarter was revised to 2.1% from a previously reported 2.9%. Personal consumption grew 2.5%, well above predictions of 1.9%, the report said, adding to the view that the economic recovery is gaining traction. The report came on the heels of data showing that the U.S. private sector added just 218,000 jobs in July, falling short of forecasts for jobs growth of 230,000. The dollar has strengthened since Fed Chair Janet Yellen said earlier this month that interest rates could rise sooner if the recovery in the labor market continued.
GBP/USD
The pound was steady at one-and-a-half month lows against the broadly stronger dollar on Wednesday, amid growing confidence in the U.S. recovery as investors awaited a preliminary report on U.S. second quarter growth and the outcome of the Federal Reserve’s latest policy meeting later in the day. The U.S. was to release the preliminary estimate on second quarter gross domestic product growth later Wednesday, which was to be followed by the conclusion of the Fed’s latest policy meeting later in the day. The dollar has strengthened since Fed Chair Janet Yellen said earlier this month that interest rates could rise sooner if the recovery in the labor market continued. The greenback received an additional boost in recent sessions as economic data indicated that the recovery is gaining traction. A report by the Commerce Board on Tuesday showed that U.S. consumer confidence rose to the highest level in seven years this month.
USD/JPY
The Japanese yen was unchanged after industrial production data came in weaker than expected on Wednesday. Japanese yen unchanged after industrial output weakens sharply Japanese yen stronger in Asia. Japan June industrial output fell 3.3%, below the 1.2% expected on month, and the first drop in two months. The data sent investors betting that the Federal Reserve on Wednesday will make fresh cuts to its monthly bond-buying program and deliver an upbeat take on the U.S. economy. Fed asset purchases which have stimulated the economy off and on since the 2008 crisis coupled with low interest rates tend to weaken the dollar by sending investors to stocks, while talk of an end to such loose policies often bolsters the U.S. currency.
Get The News You Want
USD/CAD
The U.S. dollar rose to one-and-a-half month highs against its Canadian counterpart on Wednesday, supported by the release of stronger than expected data on U.S. second quarter growth as markets eyed the Federal Reserve's upcoming policy statement. The Commerce Department reported that gross domestic product expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 0.3%. The contraction in the first quarter was revised to 2.1% from a previously reported 2.9%. Personal consumption grew 2.5%, well above predictions of 1.9%, the report said, adding to the view that the economic recovery is gaining traction. The robust data offset a report showing that the U.S. private sector added just 218,000 jobs in July, falling short of forecasts for jobs growth of 230,000. In Canada, official data showed that the raw materials price index rose 1.1% in June, compared to expectations for a 0.6% gain, after a 0.3% fall in May.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.