Forex - Dollar falls on upwardly revised GDP data, strong factory report

Published 12/20/2012, 04:04 PM
Updated 12/20/2012, 04:05 PM
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Investing.com - The dollar fell against most major currencies Thursday after the U.S. government revised third-quarter gross domestic product growth rates higher than expected.

Strong factory data in the Philadelphia area pushed the dollar down as well in a risk-on trading session that was muted by U.S. fiscal uncertainty.

In U.S. trading on Thursday, EUR/USD was up 0.10% at 1.3240, as the European Commission reported that its December index of household confidence in the 17-nation currency group improved to -26.6 from -26.9 in November.

Analysts were forecasting no change for the indicator.

In the U.S., official data released earlier showed that manufacturing activity in the Philadelphia-region expanded at its fastest pace in eight months in December.

The Philly Fed manufacturing index rose to 8.1 in December from -10.7 in November, compared to expectations for a reading of -3.0.

Elsewhere, the National Association of Realtors reported earlier that existing home sales rose by 5.9% to a seasonally adjusted 5.04 million units in November, beating market calls for U.S. existing home sales to rise 2.3% to 4.87 million units.

Revised government data showed that the U.S. economy grew by an annualized 3.1% in the third quarter of this year, up from a preliminary estimates of 2.7% and also above market calls for 2.8% growth.

On the labor front, the U.S. Department of Labor reported that weekly initial jobless claims last week rose by 17,000 to 361,000, compared to expectations for an increase of 13,000 to 357,000.

Fiscal uncertainty in the U.S. marked by a congressional budgetary impasse kept some investors parked in safe and liquid dollar positions.

Failure to prevent tax hikes from taking effect at the end of this year right when automatic spending cuts are due to take effect could tip the U.S. economy into a recession.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.20% at 1.6280.

In the U.K., retail sales came in flat in November, missing expectations for a 0.3% increase, according to national data.

Year-on-year, retail sales rose at an annualized rate of 0.9% in November also missing expectations for a 1.5% increase, after rising at a revised rate of 0.8% in the preceding month.

The dollar was flat against the yen, with USD/JPY trading unchanged at 84.41 and down against the Swiss franc, with USD/CHF trading down 0.19% at 0.9116.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.17% at 0.9872, AUD/USD up 0.05% at 1.0487 and NZD/USD trading down 0.01% at 0.8340.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.09% at 79.30.

On Friday, the U.S. will unveil revised data on consumer sentiment from the University of Michigan, as well as government data on personal income and spending.





 

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