USD Stays Strong in Expectations of US Q3 GDP Report
The US dollar remains steady versus major currencies today, trading near a 10-week high. The dollar index traded at 96.56, after hitting a two-month high on Thursday. Growth of the USD was largely due to the losses in the euro, which has a 57.6% weighting in the index. Also, the dollar was boosted by rising US stocks.
The US dollar lost 0.2% versus the Japanese yen, with the USD/JPY pair trading at 112.14 level. Meanwhile, the euro traded slightly higher at $1.1383, after it hit a two-month low of $1.1353 yesterday. The single currency lost ground after the European Central Bank failed to convince markets that interest rates would rise.
Markets expect release of the US GDP data. The US economy is forecast to have grown at a 3.3% annualized rate in the third quarter, following 4.2% in the second quarter. But many analysts see a pace faster than 3% as temporary. It’s projected to cool this quarter and further soften in 2019 as the tax-cut boost fades, borrowing costs climb and inflation firms up amid Trump’s trade war with China.
Meanwhile, the US Federal Reserve is expected to raise interest rates for the fourth time this year in December and continue lifting them gradually to keep inflation near its 2% goal.