The U.S. dollar continued to be higher on Thursday, after data showed that the U.S. economy expanded faster than previously estimated in the second quarter and jobless claims fell last week, indicating that the economy remains on a solid footing that could support a Fed rate hike this year.
The Commerce Department released a report showing that real gross domestic product increased by 3.7 percent in the second quarter compared to the previously reported 2.3 percent growth.
With the upward revision, the pace of GDP growth in the second quarter was even stronger than the 3.2 percent jump expected by economists.
The Labor Department data showed that first-time claims for U.S. unemployment benefits decreased modestly in the week ended August 22nd.
The report said initial jobless claims edged down to 271,000, a decrease of 6,000 from the previous week’s unrevised level of 277,000. Economists had expected claims to dip to 270,000.
With the drop, jobless claims partly offset the modest increases seen over the past weeks, although they remain above the more than forty-year low of 255,000 set in the week ended July 18th.
Speaking at the sidelines of the Jackson Hole symposium, the Kansas City Federal Reserve Bank President Esther George opined that the Fed needs to start its normalisation process as the economy is “continuing a trend rate of growth.”
She told that it is premature to tell whether the recent market volatility will affect the economy.
The annual economic symposium in Jackson, Wyoming gets underway today, with global economic and financial leaders due to be present in full attendance. The Fed Chair Janet Yellen will not attend the symposium, but the Federal Reserve Vice Chairman Stanley Fischer is scheduled to speak in place of her.
The dollar was on a firmer footing on Wednesday, benefited by the surprise increase in durable goods orders and comments from the New York Fed President William Dudley.
The Federal Reserve may delay hiking interest rates until at least December. The case for a rate hike in September is “less compelling” given problems with the global economy and plunging stocks, said William Dudley, the president of the New York Fed, on Wednesday.
Yesterday, the greenback rose 0.9 percent against the yen, 1.65 percent against the franc, 1.8 percent against the euro and 1.45 percent against the pound.
The greenback has been trading higher in the European session.
In early New York deals, the greenback spiked up to a 6-day high of 1.1247 against the euro, reversing from an early low of 1.1366. The next possible resistance for the greenback may be located around the 1.10 mark. At yesterday’s close, the pair was valued at 1.1310.
Figures from Destatis showed that Germany’s import prices declined at a faster than expected pace in July.
The import price index fell 1.7 percent year-over-year in July, faster than June’s 1.4 percent decline. Economists had expected the same 1.4 percent drop for the month.
The greenback added 0.3 percent to hit a 1-1/2-month high of 1.5412 against the Sterling, compared to 1.5457 hit at Wednesday’s New York session close. The greenback is seen finding resistance around the 1.53 level.
Data from Nationwide Building Society showed that U.K. house price inflation eased to a more than two-year low in August.
House prices rose 3.2 percent year-on-year in August, slower than the 3.5 percent increase seen in July. Nonetheless, it was faster than the expected 3.1 percent increase.
The greenback appreciated to 0.9591 against the franc, its strongest since August 21. This is a 0.5 percent increase from Wednesday’s closing quote of 0.9543. Further gains may lead the greenback to a resistance around the 0.97 zone.
The greenback that ended yesterday’s trading at 119.91 against the Japanese yen advanced to a 3-day high of 120.63. On the upside, the greenback may find resistance around the 122.00 region.
The greenback rebounded to 0.6433 against the kiwi, 1.3255 against the loonie and 0.7120 against the aussie, coming off from its early low of 0.6492, multi-day lows of 1.3185 and 0.7172, respectively. If the greenback continues rise, it may locate resistance around 0.625 against the kiwi, 1.35 against the loonie and 0.70 against the aussie.
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