Dollar Rebounds As U.S. Economic Growth Slows Less Than Expected
28 February 2019 - 8:54PM
RTTF2
The U.S. dollar reclaimed some of its lost ground against its
major counterparts in the European session on Thursday, as a data
showed that the U.S. economic growth slowed less than forecast in
the fourth quarter of 2018.
Data from the Commerce Department showed that economic growth in
the U.S. slowed in the fourth quarter of 2018, although the pace of
growth still exceeded analyst estimates.
The report said real gross domestic product climbed by 2.6
percent in the fourth quarter compared to the 3.4 percent jump in
the third quarter. Economists had expected GDP to increase by 2.3
percent.
Data from the Labor Department showed that first-time claims for
U.S. unemployment benefits rose more than expected in the week
ended February 23.
The report said initial jobless claims climbed to 225,000, an
increase of 8,000 from the previous week's revised level of
217,000.
Economists had expected jobless claims to edge up to 220,000
from the 216,000 originally reported for the previous week.
Caution prevailed in global markets due to fading optimism about
U.S.-China trade talks, the abrupt end to talks between the U.S.
and North Korean leaders and mounting geopolitical tensions.
The summit between Trump and Kim ended with no agreement after
North Korea reportedly wanted all sanctions on it lifted in
exchange, something the U.S. was not prepared to do.
The greenback traded mixed against its major counterparts in the
Asian session. While it fell against the franc and the yen, it held
steady against the euro. Against the pound, it rose.
The greenback climbed to a 3-day high of 111.09 against the yen
from yesterday's closing value of 110.99. The greenback is poised
to challenge resistance around the 113.00 level.
Having dropped to more than a 3-week low of 1.1420 against the
euro at 6:45 am ET, the greenback reversed direction and
strengthened to 1.1380. The greenback is seen finding resistance
around the 1.12 level.
The greenback appreciated to 1.3264 against the pound, from a
low of 1.3319 hit at 7:45 pm ET. Next key resistance for the
greenback is seen around the 1.31 level.
Survey data from the Nationwide Building Society showed that UK
house price inflation accelerated sharply in February, after
slowing in the previous two months, and the pace exceeded
economists' forecast.
The house price index rose 0.4 percent year-on-year following a
0.1 percent increase in January. Economists had expected a 0.3
percent gain.
Reversing from its early lows of 1.3141 against the loonie,
0.7166 against the aussie and 0.6853 against the kiwi, the
greenback firmed to a 2-day high of 1.3207, 6-day highs of 0.7117
and 0.6814, respectively. The next possible resistance for the
greenback is seen around 1.34 against the loonie, 0.70 against the
aussie and 0.67 against the kiwi.
The greenback recovered slightly to 0.9964 against the franc,
from near a 4-week low of 0.9926 seen at 8:00 am ET. The currency
had earlier set a session's high of 1.0015 at 5:00 pm ET. If the
greenback rises further, 1.02 is possibly seen as its next
resistance level.
Data from the Zurich-based KOF Swiss Economic Institute showed
that an indicator of Switzerland's future economic performance
declined for a fifth consecutive month in February and at a sharp
rate, suggesting that the economy is set for some slowdown in the
coming months.
The KOF Economic Barometer fell to 92.4 from January's 96.2,
which was revised from 95 reported initially. Economists had
expected the reading to remain unchanged at 95.
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