U.S. Dollar Strengthens As Upward Revision To GDP Data Boosts Rate Hike Hopes
29 November 2016 - 08:35PM
RTTF2
The U.S. dollar firmed against its most major counterparts in
the European session on Tuesday, as data showed that the U.S.
economy grew more than initially estimated in the third quarter,
adding to hopes for a Fed rate hike in December.
Data from the Commerce Department showed that GDP climbed by 3.2
percent in the third quarter compared to the initially estimated
2.9 percent increase. Economists had expected the pace of growth to
be upwardly revised to 3.1 percent.
The upwardly revised GDP growth in the third quarter compares to
the 1.4 percent increase seen in the second quarter and marks the
strongest growth in two years.
The Conference Board's consumer confidence index for November is
due at 10:00 am ET, with economists forecasting an increase of
101.0 points.
Investors focus on the OPEC meeting on Wednesday amid
uncertainty about whether the members of the cartel will finalize
an agreement on reducing oil production. News that non-OPEC oil
producer Russia will not attend the meeting has added to
uncertainty about the outcome.
The ADP private payrolls report for November is due tomorrow,
followed by the all-important nonfarm payrolls on Friday.
The greenback was trading mixed in the Asian session. While the
greenback declined against the yen and the euro, it held steady
against the Swiss franc. Against the pound, it advanced.
Rebounding from an early low of 111.62 against the Japanese yen,
the greenback hit a 4-day high of 113.34. If the greenback extends
rise, 116.00 is possibly seen as its next resistance level.
Data from the Ministry of Internal Affairs and Communications
showed that Japan's jobless rate stood at a seasonally adjusted 3.0
percent in October, in line with forecasts and unchanged from the
previous month.
The job-to-applicant ratio came in at 1.40, beating forecasts
for 1.39 and up from 1.38 in the previous month.
The greenback that closed Monday's trading at 1.0118 against the
Swiss franc advanced to a 4-day high of 1.0176. The greenback is
seen finding resistance near the 1.03 mark.
The greenback rose to 1.0565 against the euro, following a
decline to 1.0622 at 6:45 pm ET. The greenback may locate
resistance around the 1.04 region.
Survey data from the European Commission showed that Eurozone
economic confidence improved to a 11-month high in November.
The economic sentiment index came in at 106.5, up from 106.4 in
October but below the expected score of 106.8. This was the highest
since December 2015 when the reading was 106.6.
The greenback reversed from an early session's low of 0.7102
against the kiwi, edging higher to 0.7073. The greenback is likely
to locate resistance around the 0.70 region.
The greenback, having fallen to 1.3400 against the loonie at
7:30 pm ET, reversed direction and climbed to 1.3480. Continuation
of the greenback's uptrend may see it challenging resistance around
the 1.36 mark.
The greenback climbed to a 4-day high of 0.7432 against the
aussie, off its early nearly 2-week low of 0.7497. Further uptrend
may take the greenback to a resistance around the 0.72 zone.
On the flip side, the greenback fell to 1.2493 against the
pound, off its previous high of 1.2388. The next possible support
for the greenback is seen around the 1.32 area.
Data from the Bank of England showed that U.K. mortgage
approvals increased to a 7-month high in October.
The number of mortgages approvals increased to 67,518 in October
from 63,594 in September. This was the highest since March, when
approvals totaled 69,994. The expected level was 65,000.
At 12:40 pm ET, Federal Reserve Governor Jerome Powell is
expected to speak about the economic outlook at the Economic Club
of Indiana Luncheon, in Indianapolis.
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