Investors noted that activity in that country grew slightly faster than expected in the second quarter.
He global dollar traded higher for a second straight session after data showed the economy was USA grew a little faster than expected in the second quarter, modestly reducing expectations for a larger 50 basis point (bp) rate cut next month by the Fed. Federal Reserve (Fed).
He dollar index advanced 0.3% to 101.35 after the data from the GDP and the report of requests for subsidies by unemployment. For the week, it gained 0.6%, on track for its biggest weekly gain since early April. This comes after the president of the Federal Reserve Bank from Atlanta, Raphael Bosticsaid Wednesday that it may be “time to act” on rate cuts but wanted to be sure before pulling the trigger.
Following the US data, the dollar rose to a one-week high against the yen, of 145.55 yen, and last rose 0.1% to 144.77 yen. The dollar/yen pair is the most sensitive to economic expectations and usually moves in line with the yields on two-year US Treasury bonds.
In front of the euro, The dollar gained ground, with the single European currency falling 0.4% to $1.1077. The euro is down 1.04% for the week so far, the biggest weekly drop since early April.
The dollar was strengthened by the economic data from the United States
Data on Thursday showed GDP grew at an annualized rate of 3% in the second quarter, according to the second estimate of the Bureau of Economic Analysis. That is an upward revision from the 2.8% rate reported last month and up from the 1.4% increase seen in the first quarter. Economists polled by Reuters had forecast GDP would remain unchanged at 2.8%.
In a separate report, applications for subsidies for unemployment fell 2,000 to a seasonally adjusted 231,000 for the week ended Aug. 24. Economists polled by Reuters had forecast 232,000 applications for the week.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, rose by 13,000 to a seasonally adjusted 1.868 million, close to levels seen at the end of 2021, suggesting persistent joblessness.
“So far, the data seems consistent with a 25 basis point cut, not 50, which has been our view,” he said. Vassili Serebriakov, currency strategist at UBS in New York.
The futures of the interest rates U.S. rate cuts on Thursday priced in a 35% chance of a 50-basis-point easing next month, down slightly from Wednesday’s 37% chance, according to LSEG calculations. Markets also priced in about 102 basis points of cuts by the end of 2024.
Source: Ambito
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