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Dollar moves higher on upbeat U.S. GDP data

Published 02/26/2016, 08:40 AM
© Reuters.  Dollar gains ground vs. rivals after U.S. GDP beats estimates
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Investing.com - The dollar moved higher against the other major currencies on Friday, supported by the release of strong U.S. fourth-quarter economic growth data.

USD/JPY rose 0.30% to 113.33.

The dollar strengthened after preliminary data showed that U.S. gross domestic product grew 1.0% in the fourth quarter, compared to a previously reported 0.7% growth rate and expectations for a 0.4% rate.

A separate report showed that the U.S. goods trade deficit widened to $62.23 billion in January from $61.50 billion the previous month. Analysts had expected the goods trade deficit to narrow to $61.10 billion last month.

In Japan, data earlier showed that Tokyo’s consumer price index rose at an annual rate of 0.1% in February, compared to expectations for a 0.3% fall and after a 0.3% slip the previous month.

Tokyo’s core CPI, which excludes fresh food, ticked down 0.1% this month, confounding expectations for a 0.2% fall and after a 0.1% decline in January.

The dollar trimmed losses against the pound, with GBP/USD steady at 1.3972.

Sterling remained under pressure as concerns over a potential Brexit lingered.

Several senior members of Prime Minister David Cameron’s Conservative party, including London Mayor Boris Johnson, said this week that they will be backing the campaign to leave the EU, in a blow to his plans to remain in the bloc.

Earlier Friday, Bank of England Governor Mark Carney said that global growth was a "serial disappointment" and that monetary stimulus did have value as it supports economic activity.

Carney was speaking at the G20 Conference, in Shanghai.

The dollar moved higher against the euro, with EUR/USD down 0.23% at 1.09935, while USD/CHF gained 0.36% to trade at 0.9941.

In the euro zone, preliminary data showed that Germany’s CPI ticked up 0.4% in February, disappointing expectations for a 0.5% rise, after a 0.8% fall the previous month. Year-on-year, consumer prices were flat, compared to expectations for a 0.1% gain.

Meanwhile, the Australian dollar was weaker, with AUD/USD down 0.54% at 0.7216, while NZD/USD held steady at 0.6725.

USD/CAD edged up 0.15% to 1.3548. The commodity-related loonie had gained ground earlier, as oil prices remained supported above $33 a barrel following reports Saudi Arabia, Qatar, Venezuela and Russia will meet in March to discuss capping crude oil production.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.28% to 97.72, re-approaching Wednesday’s three-week high of 97.92.

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