Dollar rallies to a 1-1/2 year high after Wednesday's hawkish FOMC statement
|The greenback continued Wednesday's post-FOMC ascent and ended the day higher against majority of its peers on Thursday on continued speculation that the Federal Reserve would raise rates sooner rather than later.
Reuters reported U.S. economic growth accelerated in the fourth quarter as businesses replenished depleted inventories to meet strong demand for goods, helping the nation to post its best performance in nearly four decades in 2021. Gross domestic product increased at a 6.9% annualized rate last quarter, the Commerce Department said in its advance GDP estimate on Thursday. That followed a 2.3% growth pace in the third quarter. Economists polled by Reuters had forecast GDP growth rising at a 5.5% rate. Estimates ranged from as low as a 3.4% rate to as high as a 7.0% pace.
The economy grew 5.7% in 2021, the strongest since 1984. It contracted 3.4% in 2020, the biggest drop in 74 years.
Versus the Japanese yen, dollar found renewed buying at 114.48 in Asian morning and resumed Wednesday's ascent following hawkish FOMC statement and rose to an intra-day high at 115.48 in New York morning on usd's broad-based strength before retreating to 115.16 on profit-taking.
The single currency remained under pressure in Asia after Wednesday's selloff in post-FOMC trading and fell below 2021 16-month bottom at 1.1187 (November) to 1.1133 in New York morning on usd's continued strength together with cross-selling of euro especially vs sterling before trading sideways.
The British pound also remained under pressure in Asia and fell to a 1-month trough at 1.3359 at New York open on usd's broad-based strength. However, the pair then pared its losses and staged a short-covering rebound to 1.3406 in New York morning before stabilising.
Data to be released on Friday:
Japan Tokyo CPI, Australia PPI, France consumer spending, GDP, producer prices, Swiss KOF indicator, Italy business confidence, consumer confidence, producer prices, German import prices, GDP, EU business climate, economic sentiment, industrial sentiment, services sentiment, consumer confidence, U.S. personal income, personal spending, PCE price index, employment wages, employment costs, University of Michigan sentiment and Canada budget balance on Friday.
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