The dollar is gaining ground against all of its major competitors Thursday, after U.S. GDP showed continued improvement. The rise in GDP has investors feeling confident that the U.S. Federal Reserve will stay on track to raise interest rates in September.
Economic activity in the U.S. increased by less than expected in the second quarter, the Commerce Department revealed in a report on Thursday, although the report also showed a notable upward revision to the data for the first quarter.
The Commerce Department said real gross domestic product increased at an annual rate of 2.3 percent in the second quarter compared to expectations for an increase of about 2.6 percent.
However, the report also said first quarter GDP rose by an upwardly revised 0.6 percent compared to the 0.2 percent contraction previously reported.
First-time claims for U.S. unemployment benefits rebounded in the week ended July 25th, according to a report released by the Labor Department on Thursday, with claims bouncing off the more than forty-year low set in the previous week.
The report said initial jobless claims climbed to 267,000, an increase of 12,000 from the previous week’s unrevised level of 255,000. Economists had expected claims to rise to about 272,000.
The Federal Reserve was noncommittal in yesterday’s monetary policy statement. The statement included some subtle changes that point toward a near-term interest rate hike, but the Fed did not provide a specific timetable.
Analysts highlighted the inclusion of the word “some” in the Fed’s assessment that it would be appropriate to raise rates “when it has seen some further improvement in the labor market.”
The dollar hovered around the $1.0970 level against the Euro Thursday morning, but has since broken out to a 1-week high of $1.0915.
Eurozone economic confidence rose unexpectedly to a four-year high in July and businesses became more upbeat after the threat of Grexit diminished, survey results from European Commission showed Thursday.
The economic sentiment index climbed to 104 in July. A similar reading was last seen in the same month of 2011 and a higher score of 106 was recorded in June that year. Economists had forecast the indicator to fall marginally to 103.2 from 103.5 in June.
German unemployment increased unexpectedly in July, reports said citing data from the Federal Labor Agency on Thursday. The number of unemployed rose 9,000 in July from June, confounding expectations for a decline of 5,000.
The jobless rate remained unchanged at a seasonally adjusted 6.4 percent in July. The rate came in line with expectations.
Germany’s unemployment rate held steady in June, figures from Destatis showed Thursday. The jobless rate came at an adjusted 4.7 percent in June, the same rate as in the previous month. In the corresponding month last year, the rate was 5.0 percent.
German inflation slowed to a 5-month low in July as energy prices declined further, preliminary data from Destatis showed Thursday. Consumer price inflation eased marginally to 0.2 percent in July from 0.3 percent in June. This was the lowest rate since February, when it was 0.1 percent. Inflation was expected to remain at 0.3 percent.
The buck slipped to a low of $1.5640 against the pound sterling Thursday morning, but has since climbed to $1.5590.
The greenback surged to a month and a half high of Y124.581 against the Japanese Yen Thursday, but has since eased back to around Y124.285.
Industrial production in Japan climbed a seasonally adjusted 0.8 percent on month in June, the Ministry of Economy, Trade and Industry said on Thursday. That beat expectations for an increase of 0.3 percent following the 2.1 percent contraction in May.
The material has been provided by InstaForex Company – www.instaforex.com