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Forex - USD/JPY rise as U.S. growth figures meet expectations

Published 07/27/2012, 12:12 PM
Updated 07/27/2012, 12:14 PM
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Investing.com - The dollar traded higher against the yen on Friday as investors snapped up greenback positions on news the U.S. economy grew in line with expectations during the second quarter, which put talk of Fed intervention at bay.

The U.S gross domestic product grew 1.5% on year during the April-June quarter, according to advance estimates from the Commerce Department.

In U.S. trading on Friday, USD/JPY hit 78.54, up 0.45%, up from a session low of 78.08 and off a high of 78.65.

The pair was likely to find support at 78.08, the earlier low, and resistance at 78.80, the high of July 20.

The U.S. economy cooled the pace of its growth in the second quarter but largely in line with expectations, even outperforming than some estimates.

The country's GDP figures put to rest talk that at least for  now, the Federal Reserve will stimulate the economy with stimulus measures such as quantitative easing, which are asset purchase from banks the pump liquidity into the economy to spur recovery, weakening the dollar in the process.

Furthermore, the U.S. government revised first-quarter GDP rates up to 2% percent from 1.9%.

Meanwhile, consumer sentiment surprised on the upside in the U.S.

The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment fell to 72.3 in July from 73.2 in June.

Analysts had expected the figure to hit 72.0, which was July's preliminary reading.

The yen was down against the pound and down against the euro, with GBP/JPY up 0.68% and trading at 123.50 and EUR/JPY up 1.14% and trading at 97.13.







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