Dollar Corrects Lower Post US GDP Release

Dollar Corrects Lower Post US GDP Release

By: Oliver Miller | Where To Trade | On:30-10-2014 09:19
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Key Highlights

  • US Gross Domestic Product Annualized released by the US Bureau of Economic Analysis increased by 3.5% according to the preliminary release, compared with the expectation of 3.0%.
  • US initial jobless claims rose to 287K, up from the previous revised reading of 284K.
  • US Personal Consumption Expenditures, released by the US Department of Commerce was down from 2.3% to 1.2% in the third quarter of 2014 according to the preliminary release.
  • German unemployment rate exceeded the market expectation, as it declined by 22K in October whereas the forecast was of 5K increase.
  • KOF Swiss Leading Indicator is released by the Swiss Institute for Business Cycle Research registered an increase from the previous revised reading of 99.3 to 99.8.
  • EURUSD pair spiked below the 1.2550 level recently, but after the US GDP release it managed to pop higher back above the 1.2600 level.

 

US GDP

Earlier during the NY session the US Gross Domestic Product Annualized was released by the US Bureau of Economic Analysis. The market was expecting the US GDP to be around 3.0%, down from the previous reading of 4.0%. However, the outcome was a touch better, as the US GDP increased at an annual rate of 3.5 percent in the third quarter of 2014, according to the advance estimate. The outcome was positive, as the report mentioned that there were positive contributions from sectors such as personal consumption expenditures (PCE), exports, nonresidential fixed investment and federal government spending.

There was one important data which we need to analyze i.e. the US price index for gross domestic purchases, which was expected to register a rise of 1.4%. However, the outcome was a bit lower, as the US GDP price index came in at 1.3%. The US jobless claims were also released around the same time by the US Department of Labor. The report mentioned that the US initial jobless claims increased by 3K, from the previous week’s revised level of 284K. So, the US initial jobless claims now stand at 287K in n the week ending October 25 in terms of seasonally adjusted.

 

Where To Trade - US IJC

 

The US counting jobless claims were also released, which registered an increase from the previous reading of 2.355M to 2.384M. Overall, the US dollar was seen correcting lower against almost all currencies. The EURUSD bounced more than 50 pips from the today’s low and gained heavy bids post the US data release.

 

German Unemployment Data

There were some releases in the Euro zone as well during the London session. The main one was the German unemployment data, which was released by the German Statistics Office. The German unemployment rate stayed at 6.7% as expected. The surprising part was the German unemployment change, which registered a reading of -22K whereas the market was expecting an increase of 5K.

The EURUSD pair traded lower mostly during the London session and tested the 1.2550 support area where it managed to find buyers. The pair climbed sharply after the US releases and trading around 1.2590 as of writing.

Oliver Miller

Oliver Miller

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Oliver Miller is one of the best financial analyst with 18 years of online trading experience

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