U.S. Dollar Advances After Mixed Economic Data
27 October 2016 - 9:25PM
RTTF2
The U.S. dollar was higher against its major counterparts in
early New York deals on Thursday, buoyed by a rise in treasury
yields following the release of mixed reports on durable goods
orders in September and weekly jobless claims in the week ended
October 22.
The yield on the benchmark 10-year Treasury note rose to 1.84
percent, while that of 2-year equivalent was up by 0.88 percent.
Yields move inversely to bond prices.
Data from the Commerce Department showed that new orders for
U.S. manufactured durable goods unexpectedly edged lower in the
month of September.
The Commerce Department said durable goods orders dipped by 0.1
percent in September after rising by a revised 0.3 percent in
August.
The slight drop surprised economists, who had expected orders to
rise by 0.2 percent compared to the flat reading that had been
reported for the previous month.
Report from the Labor Department showed that first-time claims
for U.S. unemployment benefits saw a modest decrease in the week
ended October 22nd.
The report said initial jobless claims edged down to 258,000, a
decrease of 3,000 from the previous week's revised level of
261,000.
Economists had expected jobless claims to dip to 255,000 from
the 260,000 originally reported for the previous week.
Traders also reacted positively to the latest batch of earnings
results from well-known companies such as Twitter, Tesla and
Ford.
Growing expectations that the US Federal Reserve will raise
interest rates by the end of the year also underpinned the
currency.
The greenback was lower against its counterparts, except the
Japanese yen, in the European session.
The greenback strengthened to 104.89 against the Japanese yen,
its strongest since July 29. The greenback-yen pair is seen
targeting resistance around the 106.00 zone.
The greenback, having fallen to a weekly low of 1.2272 against
the pound at 4:30 am ET, retreated in a short while and was trading
at 1.2213. Continuation of the greenback's uptrend may see it
finding resistance around the 1.20 zone.
Preliminary data from the Office for National Statistics showed
that the U.K. economy expanded more than expected in the third
quarter.
Gross domestic product climbed 0.5 percent sequentially in third
quarter, faster than the expected growth of 0.3 percent.
The greenback bounced off to 0.9935 against the Swiss franc,
from a low of 0.9914 hit at 7:00 am ET. If the greenback extends
rise, 1.01 is possibly seen as its next resistance level.
The greenback advanced to 2-day highs of 0.7604 against the
aussie and 0.7122 versus the kiwi, off its early lows of 0.7652 and
0.7167, respectively. The next possible resistance for the
greenback may be found around 0.74 against the aussie and 0.70
against the kiwi.
The greenback bounced off slightly to 1.0909 against the euro,
from a low of 1.0930 hit at 8:30 am ET. On the upside, 1.06 is
possibly seen as the next resistance level for the greenback.
Data from the European Central Bank showed that Eurozone money
supply grew at a slower pace in September.
M3 expanded 5 percent year-on-year in September following a 5.1
percent rise in August. Economists had forecast the rate to remain
at 5.1 percent.
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