Dollar recovers on short covering ahead of U.S. GDP: May 26, 2017
|Market Review - 25/05/2017 22:26GMT
Dollar recovers on short covering ahead of U.S. GDP
The greenback pared some of the losses it made after the release of Fed's cautious FOMC minutes and edged higher against majority of its peers on Thursday. The greenback also received minor support on short covering ahead of release of key U.S. GDP data due out on Friday
Versus the Japanese yen, dollar pared its overnight losses due to FOMC minutes and gained to 111.70 in Asian morning, then rose to session high at 111.94 in European morning. Despite a brief retreat to 111.68 in New York morning, the greenback found renewed support and rebounded to 111.94, however, offers there checked intra-day bounce and price later edged lower in New York afternoon.
Although the single currency traded with a firm bias in Asia and gained to session high at 1.1250 in European morning, failure to penetrate Tuesday's 6-month peak at 1.1268 triggered profit-taking and price dropped to 1.1194 at New York open and later move narrowly in subdued New York afternoon session.
The British pound traded with a firm bias in Asia and briefly spiked up to session high at 1.3015 in European morning, however, cable swiftly pared its gains after the release of weak UK GDP data and tumbled to an intra-day low at 1.2932 in New York morning due partly to cross-selling of sterling especially vs euro.
The Office for National Statistics said Britain's economy expanded at its slowest rate in a year in the three months to the end of March. Gross domestic product grew by just 0.2 percent compared with an earlier estimate of 0.3 percent, the ONS said.
In other news, Fed's Brainard said 'euro area growing more solidly, while emerging mkts broadly doing better as well; that for Fed's purposes feels upward revisions to global growth will continue, posing fewer risks for the U.S.'
On the data front, initial claims for state unemployment benefits increased 1,000 to a seasonally adjusted 234,000 for the week ended May 20, the Labor Department said.
Data to be released on Friday:
Japan Nationwide CPI, Tokyo CPI, Italy business confidence, consumer confidence, U.S. GDP, PCE, core PCE, durable goods and consumer sentiment.
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