Dollar Climbs After Upward Revision To U.S. GDP Data; Yellen's Speech Due
May 27 2016 - 5:33AM
RTTF2
The U.S. dollar strengthened against its most major rivals in
mid-European trading on Friday, after data showed that the U.S.
economy expanded faster than the initial estimate in the first
quarter, supporting expectations of a Federal Reserve interest rate
increase in June.
Data from the Commerce Department showed that the U.S. economic
growth was stronger than previously estimated in the first quarter,
although the pace of growth still reflects a significant
slowdown.
The report said the pace of growth in gross domestic product was
upwardly revised to 0.8 percent from the initial estimate of 0.5
percent.
Nonetheless, the revised GDP growth in the first quarter
compares to the 1.4 percent jump seen in the fourth quarter and the
0.9 percent increase expected by economists.
Traders now await the University of Michigan's revised report on
consumer sentiment in May, due shortly. The consumer sentiment
index is expected to be downwardly revised to 95.5 from the
mid-month reading of 95.8, which represented an eleven-month
high.
At 1:15 pm ET, Yellen is scheduled to speak with Harvard
Professor Gregory Mankiw and receive an award from the Radcliffe
Institute for Advanced Study.
Traders are likely to closely scrutinize Yellen's remarks for
any hints regarding whether the Fed intends to raise interest rates
at its meeting next month.
The greenback showed mixed performance in Asian deals. While the
currency held steady against the franc, euro and the pound, it
declined against the yen.
The greenback climbed to 1.1153 against the euro, after having
fallen to 1.1201 at 2:00 am ET. On the upside, the greenback is
likely to find resistance around the 1.10 area.
Data from the Bank of Italy and the Centre for Economic Policy
Research showed that a measure of the current economic situation in
the euro area declined for a fourth straight month in May, amid an
industrial slowdown and low inflation.
The euro-coin indicator dropped to 0.26 from 0.28 in April.
The greenback rose back to 1.4623 against the pound, heading
closer to pierce its early 2-day high of 1.4620. Further uptrend
may see the greenback challenging resistance around the 1.45
mark.
The latest survey from GfK showed that the U.K. consumer
confidence showed a bit of improvement in May but remained
pessimistic, with an index score of -1.
That beat forecasts for -4 and was an improvement over April's
-3, although it still was negative.
Reversing from an early low of 0.9885 against the Swiss franc,
the greenback edged up to 0.9915. The greenback is seen finding
resistance around the 1.01 mark.
The greenback was trading in a positive territory against the
kiwi, with the pair trading at 0.6720. Against the aussie, it
advanced to 0.7198. Continuation of the greenback's uptrend may see
it finding resistance around 0.665 against the kiwi and 0.71
against the aussie.
Extending early rally, the greenback strengthened to a 2-day
high of 1.3068 against the Canadian dollar. This marks a 0.7
percent gain from Thursday's closing value of 1.2977. The greenback
is likely to test resistance around the 1.32 region.
On the flip side, the greenback declined to 109.48 against the
Japanese yen, compared to 109.76 hit late New York Thursday. On the
downside, 108.00 is likely seen as the next support level for the
greenback-yen pair.
Data from the Ministry of Internal Affairs and Communications
showed that Japan's consumer prices fell 0.3 percent on year in
April.
That beat forecasts for -0.4 percent, although it weakened from
-0.1 percent in March.
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