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Dollar turns back lower as U.S. personal spending disappoints

Published 12/22/2016, 10:56 AM
© Reuters.  Dollar loses ground vs. other majors in quiet trade
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Investing.com - The dollar turned back lower against the other majors currencies on Thursday, after disappointing U.S. spending data overshadowed a strong U.S. economic growth report released earlier in the session.

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

EUR/USD was up 0.51% at 1.0480, off Tuesday’s fresh 14-year low of 1.0349.

The U.S. Bureau of Economic Analysis said personal spending rose 0.2% in November, disappointing expectations for a 0.3% gain.

The report also showed that personal income was flat last month, compared to expectations for an increase of 0.3%.

Earlier Thursday, the U.S. Commerce Department said gross domestic product grew at an annual rate of 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and above expectations for a reading of 3.3%.

Another report showed that U.S. durable goods orders dropped 4.6% in November, compared to expectations for a 4.7% decline. Core durable goods orders, which exclude transportation items, rose 0.5%, beating expectations for an uptick of 0.2%.

Meanwhile, the U.S. Labor Department said initial jobless claims rose by 21,000 to 275,000 last week, compared to expectations for a rise of only 2,000.

Elsewhere, GBP/USD slipped 0.21% to 1.2327, still close to Tuesday’s one-month low of 1.2310.

USD/JPY eased 0.09% to 117.46, while USD/CHF slid 0.33% to 1.0235.

The Australian dollar was weaker, with AUD/USD down 0.11% at 0.7225, while NZD/USD gained 0.28% to 0.6916.

Meanwhile, USD/CAD advanced 0.44% to trade at a three-and-a-half week high of 1.3471.

Statistics Canada reported on Thursday that retail sales increased 1.1% in October, exceeding expectations for a 0.2% rise. Core retail sales, which exclude automobiles, gained 1.4% in October, beating expectations for a 0.7% gain.

Another report showed that Canada’s consumer price index slipped 0.4% last month, compared to expectations for a 0.2% fall. Year-on-year, consumer prices increased 1.2% in November, below expectations for a 1.4% rise.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.30% at 102.71, the lowest since Monday but still close to Tuesday’s fresh 14-year highs of 103.62.

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