Dollar bulls were given yet another boost yesterday as the US revealed better than expected consumer confidence data and the dollar index hit a fresh five and a half month high during the session. Without wanting to sound like a broken record, it will still be the currency to focus on today as we get a raft of economic data from across the pond with the major ones being ADP private payrolls, GDP and later the FOMC rate decision.
Labour market data is key and will continue to be so, even the weekly jobless claims that last week dipped below the 300k level, are a focus for traders as this has also been a driver behind the recent dollar strength. This means today’s ADP figure, due to come in at 230k, will be closely watched, but out of the three it’s the GDP data that is likely to move the markets most. This is because tonight’s FOMC does not include a press conference and so there’s unlikely to be any changes to what we saw or heard last month.
GDP is due to bounce from the shock -2.9% decline in the first quarter, with the increase expected to register a rise of 3.0%. This is seen as an important milestone for the US economy which suffered a severe retraction as a result of the incredibly harsh winter where the consumer was hit hard. As mentioned yesterday’s data showed the consumer element at least is back on track with confidence hitting its highest level since October 2007, but it’s not just about consumers and the business investment element will be closely watched to see if companies are ramping up investment ahead of making hay in the second half of the year.
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