Dollar Higher After Upward Revision To U.S. GDP, Positive Jobless Claims Data
29 September 2016 - 7:43PM
RTTF2
The U.S. dollar firmed against its major counterparts in early
New York deals on Thursday, as the U.S. economy expanded more than
previously estimated in the second quarter and first-time claims
for U.S. unemployment benefits rose less than expected in the week
ended September 24, boosting Fed rate hike bets later this
year.
Data from the Commerce Department showed that the U.S. GDP
increased more than previously estimated in the second quarter,
primarily reflecting upward revisions to non-residential fixed
investment.
The Commerce Department said second quarter GDP climbed by 1.4
percent compared to the previously reported 1.1 percent increase.
Economists had expected the pace of GDP growth to be upwardly
revised to 1.3 percent.
According to a report released by the Labor Department,
first-time claims for U.S. unemployment benefits rose by less than
expected in the week ended September 24th.
The report said initial jobless claims edged up to 254,000, an
increase of 3,000 from the previous week's revised level of
251,000.
Economists had expected jobless claims to climb to 260,000.
The data came a day after Yellen's testimony before the
Congress, suggesting the likelihood for an interest rate hike by
the end of year.
"If we allow the economy to overheat, we could be faced with
having to raise interest rates more rapidly than we would want
which could conceivably jeopardize that good state of affairs that
we have come close to achieving," Yellen told lawmakers.
The greenback has been trading in a positive territory against
its major rivals, except the Swiss franc, in the European
session.
Extending early rally, the greenback appreciated by 1.1 percent
to an 8-day high of 101.82 against the Japanese yen. The greenback
is seen finding resistance around the 103.00 mark.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's retail sales declined 1.1 percent on month in
August.
That missed forecasts for a decline of 0.8 percent following the
upwardly revised 1.5 percent increase in July. The greenback
climbed to 1.1197 against the euro, up by 0.3 percent from a low of
1.1236 hit at 12:00 am ET. On the upside, 1.00 is possibly seen as
the next resistance level for the greenback.
Survey data from the European Commission showed that Eurozone
economic sentiment rebounded strongly in September to its highest
level thus far this year from a five-month low in the previous
month.
The economic sentiment index climbed to 104.9 from 103.5 in
August. Economists had forecast an unchanged reading.
The greenback was trading in a positive territory against the
pound with the pair trading at 1.3007, off its early 6-day low of
1.3057. The next possible resistance for the greenback may be found
around the 1.28 region.
Data from the Bank of England showed that U.K. mortgage
approvals declined in August to the lowest since late 2014.
The number of mortgages approved in August dropped to 60,058
from 60,925 in July. This was the lowest since November 2014, when
mortgages totaled 59,392. The level was expected to fall to 60,200
in August.
The greenback reversed from its recent 2-day low of 0.9689
against the Swiss franc, rising back to 0.9713. Further upward move
may see the greenback challenging resistance around the 0.98
area.
The greenback that rebounded from an early Asian session's
3-week low of 0.7710 against the aussie held steady in subsequent
deals, trading at 0.7665. At yesterday's close, the pair was worth
0.7692.
The greenback held steady against the kiwi, after reaching as
high as 0.7255 at 7:00 am ET. The kiwi-greenback pair finished
Wednesday's deals at 0.7284.
On the flip side, the greenback stayed weaker against the
loonie, as the latter was supported by the surprise announcement by
the OPEC agreeing to curb output in November. The greenback has set
a 6-day low of 1.3048 against the loonie at 8:30 pm ET.
The U.S. pending home sales data for August is due at 10:00 am
ET.
At the same time, Federal Reserve Governor Jerome Powell will
deliver a speech titled "Trends in Community Bank Performance Over
the Past 20 Years" at the Community Banking Research and Policy
Conference, in St. Louis.
At the same time, European Central Bank President Mario Draghi
and Vice President Vitor Constancio are expected to speak at the
First ECB Annual Research Conference in Frankfurt.
At 2:00 pm ET, Federal Reserve Bank of Minneapolis President
Neel Kashkari participates in Town Hall on economic development in
Rapid City and surrounding areas, in South Dakota.
At 4:00 pm ET, Federal Reserve Chair Janet Yellen is expected to
speak at the Minority Bankers Forum in Kansas City, via
satellite.
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