US Dollar Rises on Buoyant GDP Reports and Jobs Data

Edited by Vani Rao

USD maps gains against the Euro and Japanese yen; GBP/USD gains 0.17%

The US dollar rose against the Euro on Thursday, March 27, 2014. The Euro/USD pair fell to its near three-week low of 1.3741 on Thursday, amidst growing expectations that the European Central Bank (ECB) might resort to new policy measures if inflation slips lower than the expected levels. The Euro weakened for the third consecutive trading session, after ECB governing council member Jens Weidmann maintained on Tuesday, March 25, 2014, that the bank is considering a negative deposit rate to stall the strong gains in the Euro.

Meanwhile, the upbeat US Gross Domestic Product (GDP) figures further strengthened the demand for the US dollar. The US Commerce Department revised upwards the US GDP to 2.6% for the last quarter of 2013 from the initial forecast of 2.4%. The median GDP estimate of economists surveyed by Bloomberg stood at 2.7%.

In a separate report, the US Department of Labor reported that the number of individuals filing for unemployment benefits fell by 10,000 to 311,000. The data came in ahead of expectations, as analysts had expected jobless claims to rise by 4,000 in the past week.

The Euro/USD pair continued with its losses to close Thursday’s trading session 0.33% lower at 1.3740, after oscillating between 1.3728 and 1.3797, as indicated in the graph below. At the time of the last reporting, the Euro/USD was trading at 1.3748, up 0.05%.

currency pic 1

Market experts are expected to keep a close track of the data releases on Friday, March 28, 2014, when the US will announce revised data on consumer sentiment along with the data on personal spending. Meanwhile in the Eurozone, Germany will announce preliminary data on consumer inflation and France will report data on consumer spending.

GBP/USD

The US dollar remained lower against the GBP on Thursday, March 27, 2014, on the back of strong retail sales data reported by the UK. According to the National Statistics report, UK retail sales rose 1.7% in February, recovering from a decline of 2.0% in January, and were up 3.7% from the year-ago period.

However, the release of upbeat US economic growth data lent support to the US dollar. The US dollar managed to recover from the session low of 1.6556 on account of buoyant GDP and better-than-expected jobless claims data, which enabled it to limit its losses against the GBP.

The GBP/USD fluctuated between 1.6556 and 1.6647, before finishing Thursday’s session at 1.6611, as shown in the graph below. At the time of the last reporting, the GBP/USD was trading at 1.6617, up 0.06%.
currency pic 2

Investors will keep a close track of data releases on Friday, March 28, 2014, when the UK is scheduled to announce data on fourth-quarter economic growth as well as data on the current account.

USD/JPY

Similarly, the US dollar posted gains against the Japanese yen on Thursday, March 27, 2014, following the release of positive GDP report and employment data. As per the official report, US fourth-quarter GDP was revised higher to 2.6% from the initial estimates of 2.4%. On the other hand, the US Department of Labor reported that jobless claims fell to 311,000, its lowest level since November 2013.

On Thursday, March 27, the USD/JPY pair oscillated between 101.72 and 102.43, before settling the day at 102.18, up 0.24%, as shown in the graph below. At the time of final reporting, the USD/JPY was trading at 102.14, down 0.02%.

currency pic 3

Moving forward, on March 28, 2014, Japan is slated to announce a series of key data on household spending, inflation, and retail sales. Meanwhile, the US will report data on personal spending and consumer sentiment. Both these data are expected to trigger currency fluctuations between the USD/JPY pair.

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