Markets sleepy, dollar on hold ahead of U.S. GDP data

By Kate Duguid NEW YORK (Reuters) - The dollar was stalled on Thursday a day ahead of the release of U.S.

Reuters December 20, 2019 02:06:30 IST
Markets sleepy, dollar on hold ahead of U.S. GDP data

Markets sleepy dollar on hold ahead of US GDP data

By Kate Duguid

NEW YORK (Reuters) - The dollar was stalled on Thursday a day ahead of the release of U.S. gross domestic product data, little moved by weak factory activity data or President Donald Trump's impeachment.

The dollar has been bolstered by strong economic data reported earlier this week that decreased expectations the Federal Reserve will continue its interest-rate-cutting cycle in 2020. Thursday's Philadelphia Fed report that its business conditions index fell to 0.3 in December from 10.4 in November also failed to dent the dollar.

The dollar index <.DXY> was down 0.03% to 97.375 as traders held off from making major moves before the Commerce Department on Friday reports the final estimate of third-quarter GDP. Against the euro , the dollar was down 0.11% to $1.112.

"It's very sleepy," said Juan Perez, senior foreign exchange trader and strategist at Tempus Inc. "Markets are quiet in anticipation of what may come tomorrow when it comes to gross domestic product."

Wednesday night's vote in the Democratic-controlled House of Representatives to impeach Trump on charges of abuse of power and obstruction of Congress did not affect risk appetite because the majority-Republican Senate is widely expected to acquit the president.

The safe-haven Japanese yen strengthened against the dollar , up 0.26% to 109.23 yen.

The dollar was also mostly unmoved by Treasury Secretary Steven Mnuchin's statement on Thursday that the United States and China would sign their Phase One trade pact at the beginning of January. Mnuchin said the pact was completely finished and just undergoing a technical "scrub."

Elsewhere, the Bank of England kept interest rates steady, saying it was too soon to gauge how much Prime Minister Boris Johnson's electoral victory would lift the Brexit uncertainty that has hung over the economy. The pound was 0.51% weaker against the dollar at $1.301 , extending its precipitous drop this week after Johnson rekindled the possibility of a British exit from the European Union without a trade agreement.

The pound has fallen 3.72% since Johnson's win on Dec. 13.

The Bank of England "didn't seem too dovish but none too positive either. So, they're in the same mode as the Fed where they're just watching carefully to see how things politically are going to work out," said Perez.

(Reporting by Kate Duguid; Additional reporting by Elizabeth Howcroft; editing by Leslie Adler)

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

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