Dollar Off Highs After U.S. GDP Data
March 27 2015 - 10:51AM
RTTF2
The U.S. dollar trimmed its early advance against its major
rivals in New York deals on Friday, as U.S. economy grew at a
slower rate than forecast in the fourth quarter of 2014.
According to the final estimate released by the Commerce
Department, the GDP increased by 2.2 percent in the fourth quarter,
unchanged from the growth estimated last month.
Economists had been expecting the pace of GDP growth to be
upwardly revised to 2.4 percent, which would still reflect a
notable slowdown from the 5.0 percent growth seen in the third
quarter.
Traders await final reading of Reuters/University of Michigan's
consumer sentiment index for March, as well as the Fed Chair Janet
Yellen's speech for further signals on monetary policy. Last week,
Yellen seemed dovish on the pace of future rate rises in the
U.S.
U.S. Federal Reserve Vice Chair Stanley Fischer said that there
are signs that nonbank financial sector has not been much affected
to the types of shocks seen during the U.S. financial crisis.
"At this stage of the recovery, there are signs of reduced
nonbank financial sector vulnerabilities," Fischer said in remarks
prepared for delivery at a conference in Frankfurt, Germany. "The
available data paint a picture of a nonbank sector that has
generally reduced its vulnerability to the types of shocks that we
saw during the crisis," he added.
The greenback was higher in the early European session today,
extending Thursday's rally. Thursday, the greenback rose 0.36
percent against the franc, 0.78 against the euro and 0.24 against
the pound.
The greenback declined to 1.4921 against the pound, off early
1-week high of 1.4796. The next possible support for the greenback
may be located around the 1.50 zone.
The greenback, having advanced to a 3-day high of 0.9691 against
the franc at 4:00 am ET, retreated to 0.9611. Extension of the
greenback's downtrend may lead it to a support near the 0.95
area.
The greenback pared gains to 119.01 against the Japanese yen,
from a hit of 119.48 touched in early European deals. If the
greenback continues slide, it is likely to challenge support around
the 118.00 level.
The greenback reversed from an early 4-day high of 1.0800
against the euro, edging down to 1.0897. On the downside, the
greenback may test support around the 1.10 region.
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