US Dollar Higher After GDP Report Exceeded Forecast
The greenback has strengthened after GDP report. The US economy grew higher than initially thought in the fourth quarter. The Commerce Department data showed, that gross domestic product was found to have grown by 2.9%, up from 2.5%,. That was higher than economists’ forecasts for growth of 2.7% and was up from 2.5% in the previous quarter. Meanwhile the GDP price index was unchanged at 2.3% while GDP sales rose to 3.4% from 3.3% the prior quarter.
The euro fell slightly against the US dollar amid renewed risk appetite and reports of a possible meeting between the US and North Korean leaders in May. At the same time, the German business climate index from Gfk pleasantly surprised the markets and provided some support to the single currency. German Gfk Consumer Climate unexpectedly increased by 0.1 points to 10.9 in April. Economists had expected the estimate to drop to 10.7.
The British pound also weakened against the dollar due to the growing demand for the US currency. Also, pressure on the pound had weak data on retail orders in Britain from the CBI. British retail sales fell for the first time in five months in March due to heavy snowfall combined with financial pressures on many households, the Confederation of British Industry said. The balance of retail sales from the CBI fell to -8 from +8 in February, which was much worse than the forecast of +15 in the survey of economists.
The European Commission urged the region’s governments to stand united in trade talks with the US, to get exemption on the steel and aluminum tariffs by May 1, follow South Korea. Meanwhile, Germany is willing to offer concession to the US, and Angela Merkel is ready to lower the 10% EU tariff on autos to avoid a trade dispute.