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Dollar index holds steady after positive U.S. data

Published 12/23/2016, 10:51 AM
Dollar little changed vs. rivals, U.S. data supports
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Investing.com - The dollar held steady against the other majors currencies on Friday, after the release of positive U.S. data supported optimism over the strength of the U.S. economy.

Trading volumes were expected to be thin this week as trader were beginning to unwind positions ahead of the Christmas holiday.

EUR/USD was up 0.13% at 1.0450.

Th U.S. Census Bureau said new home sales rose 5.2% to 592.000 units in November, beating expectations for a 2.1% increase to 575.000.

In addition, the University of Michigan said its consumer sentiment index hit 98.2 this month, up from a previous estimate of 98.0. Analysts had expected the index to remain unchanged in December.

The greenback has also remained broadly supported since the Federal Reserve concluded its policy meeting last week by raising interest rates by 25 basis points and projected three more rate hikes for 2017.

Elsewhere, GBP/USD slipped 0.15% to seven-week lows of 1.2267.

Earlier Friday, the U.K. Office for National Statistics said gross domestic product grew at a rate of 0.6% in the third quarter, up from a previous estimate of 0.5% and above expectations for a growth rate of 0.5%.

A separate report showed that the U.K. current account deficit widened to £25.5 billion in the last quarter from £22.1 billion in the second quarter, whose figure was revised from a previously estimated deficit of £25.9 billion.

Analysts had expected the current account deficit to widen to £27.5 billion in the third quarter.

USD/JPY fell 0.25% to 117.26, while USD/CHF edged up 0.08% to 1.0261.

The Australian and New Zealand dollars were weaker, with AUD/USD down 0.76% at 0.7163 and with NZD/USD dropping 0.58% to 0.6865.

Meanwhile, USD/CAD gained 0.44% to a five-week high of 1.3544.

Statistics Canada said GDP fell 0.3% in October, compared to expectations for a 0.1% rise.

Canada’s economy grew at a rate of 0.4% in September, up from a previous reading of 0.3%.

The commodity-related Canadian dollar was also affected by a drop in oil prices on Friday, following news of increasing output from Libya.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 103.02, just off Tuesday’s fresh 14-year highs of 103.62.

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