The Dollar holds steady as data shows strength
Economic data helped drive currency market flow as the latter half of the week brings new information to market participants. On Wednesday, traders needed to absorb US GDP data for the second quarter along with the FOMC’s decision on interest rates. Thursday will also bring interest rate decisions from both the BoE and ECB. Friday, is the US non-farm payroll report.
The Japanese manufacturing PMI slipped to 50.7 from 52.3, showing that despite the Abe quantitative easing, the country is still facing economic headwinds. This is the lowest in four months and follows the disappointing industrial output figures out earlier this week which showed a decline of 3.3% in June vs. consensus -1.5%. In addition, Japan reported weak wage earnings, with base wages actually falling 0.2% year-over-year. Japan is still experiencing weak inflation data, despite the recent climb in headline inflation seen earlier this month.
Economic data in the US was better than expected. Second quarter GDP came in at 1.7% compared to the 1% expected by economists. First quarter GDP was revised lower to 1.1%, from the estimate of 1.7%. Consumption came in at 1.8% which was also better than expected. Government spending was the catalyst for the surprise. The price deflator came in at .7%, compared to the 1.7% from the first quarter.
The main release for the day is the Federal Reserve statement on monetary policy. At this meeting their will be no press conference to follow which tells investors that the Fed will likely communicate no change and no variation to their bond purchase program. Many expect the Fed to begin tapering its bond purchases in September, which discounts this July meeting. The asset purchases program information will likely trump all economic data.
The USDJPY consolidated ahead of the Fed remaining below the 10-day moving average at 99.20. Support is seen near the recent lows at 97.50.
Sorry. No data so far.