Dollar Moves Higher As Data Improves and Other Top Forex News.
Source:- Google.com.pk
The dollar recovered most of yesterdays losses in moderate trading on Thursday as economic data turned positive. Brightening the outlook for the U.S. economy.
The dollar was boosted after the Labor Department announced that initial U.S. jobless claims dipped by 2,000 people to 312,000 last week, a sign that the recovery in the labor market is continuing.
While a separate report showed that personal incomes rose by 0.4% in May, in line with forecasts. However, personal spending rose by just 0.2%, below forecasts for 0.4%.
But gains were limited as yesterdays news that the U.S. economy contracted at a faster pace than initially estimated in the first quarter continued to weigh on the market.
The dollar was given a further boost later in the session after St. Louis Federal Reserve President James Bullard told Fox Business Network that an improving economy may make conditions ripe for interest rates to rise possibly in early 2015.
The news caused the euro to weaken against the dollar, with EUR/USD closing the session down -0.15% at 1.3609.
While the pound trimmed gains against the dollar after the BoE announced a new affordability test on banks and a cap on home loans, in a bid to prevent the housing market from destabilizing the U.K. economy. BoE Governor Mark Carney said the recovery is broadening and strengthening, but the housing market is the main risk to financial stability.
But the pound remains supported as the new measures did little to alter expectations that the BoE will raise interest rates ahead of other central banks.
GBP/USD closed the session up 0.24% at 1.7024.
In Asia the Japanese yen rose against most of its major peers as weaker-than-forecast U.S. data added to signs of an uneven recovery in the world’s largest economy and investors sought safety.
USD/JPY closed the session down -0.18% at 101.69.
Elsewhere, the Australian dollar was slightly lower but remains supported following yesterdays weaker than expected GDP growth out of the U.S.
AUD/USD closed the session up 0.01% at 0.9407.
And the New Zealand’s currency dollar climbed as traders bought it with borrowed U.S. dollars in what’s known as a carry trade. The strategy returned 2.7 percent this month, the most among the greenback’s 16 most-traded peers.
The Reserve Bank of New Zealand has raised its benchmark to 3.25 percent. The Fed has kept the key U.S. rate target at zero to 0.25 percent since 2008, and rates are also close to zero in Japan, and the euro area.
NZD/USD closed the session up 0.40% at 0.8773, down from a high of 0.8776 earlier.
Finally, the Canadian dollar had a topsy turvy day. Climbing against the dollar amid a tepid read on American consumer spending. But the Loonie gave up gains as oil prices softened on ebbing Iraq concerns.
USD/CAD closed the session up 0.30% at 1.0688.
More coverage of today’s session.
Reuters: Fed’s Bullard says jobs growth is ‘ahead of schedule’. – U.S. jobs growth is “way ahead of schedule,” and most data suggest the economy is getting stronger, a top Fed official said on Thursday, downplaying recent data that showed a steeper-than-expected plunge in first-quarter GDP growth.WSJ: Consumer spending rises on higher inflation. – Americans spent cautiously in May despite stronger income growth, a sign the economy is struggling to lift off after a winter downturn.
More Top Stories:
Marc Chandler: Dollar mixed, Sterling recovers. – The dollar-bloc remains firm. Sterling has recovered as macro-prudential steps do not trump rate hike pressure. China announces a modest liberalization measure.SMH: Australian dollar rallies but Kiwi has a blockbuster. – The Australian dollar rallied on Thursday after weaker than expected GDP growth out of the US gave further buying impetus to those seeking antipodean yields.
International Business Times: Will Kiwi dollar’s rise force Reserve Bank of New Zealand to intervene? – Weaker than expected US growth data on Wednesday underpinned the view that the Federal Reserve will take longer to tighten dollar supplies, helping risk appetite and strengthening other currencies against the greenback.
Globe and Mail: Loonie extends gains amid disappointing U.S. consumer spending data. – The Canadian dollar was slightly higher Thursday amid mixed commodity prices and a tepid read on American consumer spending.
Bloomberg: Gold falls for first time in seven sessions on jobs data. – Gold futures fell for the first time in seven sessions as fewer Americans filed applications for unemployment benefits last week, crimping demand for the precious metal as alternative investment.
Dollar wilts in wake of downbeat US GDP revision
TOKYO/SYDNEY: The dollar languished near one-month lows against a basket of major currencies on Thursday, following a surprise downward revision to US first quarter economic growth.The dollar index fell as far as 80.091 on Wednesday, a low not seen since May 22, as investors reacted negatively to data that showed the US gross domestic product contracted at a 2.9 per cent annualised pace, the sharpest decline in five years.
The index, which tracks the greenback against a baske ..
The dollar index fell as far as 80.091 on Wednesday, a low not seen since May 22, as investors reacted negatively to data that showed the US gross domestic product contracted at a 2.9 per cent annualised pace, the sharpest decline in five years
The index, which tracks the greenback against a basket of rivals, recovered to 80.175 in Asian trade but was still down about 0.1 per cent on the day.
While economists said other data showed the economy rebounding in this quarter and the weak first quarter GDP showing was mainly due to one-off factors, it still gave no reason to expect the US Federal Reserve would increase interest rates anytime soon.
