Dollar records best week in one and a half months on strong data

By Kate Duguid NEW YORK (Reuters) - The dollar recorded its best week since early November after a series of strong U.S. economic data releases that make a near-term cut in interest rates unlikely. U.S

Reuters December 21, 2019 03:07:56 IST
Dollar records best week in one and a half months on strong data

Dollar records best week in one and a half months on strong data

By Kate Duguid

NEW YORK (Reuters) - The dollar recorded its best week since early November after a series of strong U.S. economic data releases that make a near-term cut in interest rates unlikely.

U.S. growth nudged up in the third quarter, the government confirmed on Friday, and there are signs the economy maintained the moderate pace of expansion as the year ended, supported by a strong labor market.

Gross domestic product increased at a 2.1% annualized rate, the Commerce Department said on Friday in its third estimate of third-quarter GDP. That was unrevised from November's estimate in line with economists' expectations. Consumer spending was stronger than previously reported, and there were upgrades to business spending.

Earlier this week, the U.S. reported that the domestic homebuilding market was regaining steam and the manufacturing sector was stabilizing. That has driven the dollar index <.DXY> up 0.56% this week. It was last up 0.35% on the day to 97.724.

The GDP and personal consumption figures are "indicators of the strength of the economy going into 2020," wrote analysts at Western Union Business Solutions. These figures "further strengthen the belief that the Federal Reserve will pause on interest rate cuts for the near future," they wrote.

Sterling was slightly stronger on the day after a bad week that has seen it take a beating from renewed concern over a hard Brexit. After hitting a 19-month high against the dollar last week on the back of Conservative Party leader Boris Johnson's electoral victory in Britain, the currency dropped when the new prime minister revived the possibility that Britain could leave the European Union without a trade agreement.

The pound was last 0.03% stronger against the dollar, at $1.301, and up 0.48% against the euro at 0.851 pence. Nevertheless, the currency was set for its worst week against the greenback in over two years, and its largest weekly loss since July 2017 versus the euro.

More than three years since Britain voted to exit the European Union in a 2016 referendum, Johnson's government will leave the EU at the end of January and has set December 2020 as a hard deadline to reach a trade agreement.

In thin pre-holiday trade, the euro weakened by 0.43% to $1.107 , while the Japanese yen was 0.11% weaker against the dollar at 109.48 yen .

(Reporting by Kate Duguid and Dhara Ranasinghe; Editing by Nick Macfie and Will Dunham)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.