Dollar Muted After U.S. GDP Data
June 27 2019 - 5:22AM
RTTF2
The U.S. dollar showed muted trading against its major opponents
in the European session on Thursday, after a data showed that the
pace of U.S. economic growth was unrevised from the previous
estimate for the first quarter.
Data from the Commerce Department showed that real gross
domestic product increased at an annual rate of 3.1 percent in the
first quarter, unrevised from the estimate released last month and
in line with economist estimates.
The unrevised rate of GDP growth in the first quarter still
reflects a significant acceleration from the 2.2 percent increase
seen in the fourth quarter of 2018.
Data from the Labor Department showed that first-time claims for
U.S. unemployment benefits increased more than expected in the week
ended June 22.
The report said initial jobless claims rose to 227,000, an
increase of 10,000 from the previous week's revised level of
217,000.
Optimism about a potential U.S.-China trade deal prevailed ahead
of the highly anticipated meeting between President Donald Trump
and Chinese leader Xi Jinping at the G-20 summit in Japan that will
kick on tomorrow.
According to a report in The South China Morning Post, the U.S.
and China have agreed to a tentative truce in their trade dispute
that would help avert the next round of tariffs on an additional
$300 billion of Chinese imports.
U.S. President Donald Trump voiced optimism over the possibility
of a trade agreement with China but said he is still considering
imposing "very substantial" tariffs on all Chinese imports if the
two countries are unable to reach a deal during the G20 summit.
The currency rose against its most major counterparts in the
Asian session, following a media report that the U.S. and China
have tentatively agreed to a truce in their trade conflict.
The greenback retreated to 0.9768 against the franc, from a
6-day high of 0.9814 hit at 1:20 am ET. Further downtrend may take
the currency to a support around the 0.96 region.
Following an 8-day high of 108.16 seen at 2:30 am ET, the
greenback pulled back to 107.77 versus the Japanese yen. The
greenback is seen finding support around the 106.00 region.
Data from the Ministry of Economy, Trade and Industry showed
that Japan retail sales rose a seasonally adjusted 0.3 percent on
month in May - shy of expectations for a gain of 0.6 percent
following the downwardly revised 0.1 percent drop in April.
On a yearly basis, retail sales were up 1.2 percent - in line
with expectations and up from the downwardly revised 0.4 percent
increase in the previous month.
The U.S. currency pared gains to 1.1381 against the euro, from a
high of 1.1348 touched at 1:15 am ET. The next possible support for
the greenback is seen around the 1.15 level.
Survey data from the European Commission showed that Eurozone
economic sentiment deteriorated more-than-expected in June.
The economic sentiment index dropped to 103.3 in June from 105.2
in May. The score was forecast to fall to 104.7.
The greenback held steady against the pound, after having
declined to a 2-day low of 1.2725 at 6:45 am ET. On the downside,
1.30 is possibly seen as the next support level for the
greenback.
The U.S. pending home sales for May will be out at 10:00 am
ET.
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