US Dollar Under Pressure Ahead of Fed Decision

US Dollar Under Pressure Ahead of Fed Decision

By: Ben Myers | Where To Trade | On:29-04-2015 12:12
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Key Highlights

  • US Dollar continued to weaken during the London session as investors await the Fed Interest Rate Decision.

  • US Gross Domestic Product Annualized released by the US Bureau of Economic Analysis was on the lower side for the first quarter of 2015, as it increased only by 0.2%, compared to the forecast of 1.1%.

  • In terms of the quarterly change, the US Gross Domestic Product Price Index posted a decline of 0.1% in Q1 2015.

  • US Personal Consumption Expenditures report was also released, which declined by 2% in Q1 2015, compared to the previous quarter decrease of 0.4%.

Key Releases:

US GDP (US Dollar)

US Personal Consumption Expenditures (US Dollar)

US GDP

Earlier during the NY session, the US Gross Domestic Product, which helps in evaluating the monetary value of all the goods, services and structures produced within a country was released by the US Bureau of Economic Analysis. The market was expecting the US GDP to increase by 1.1% in the first quarter of 2015, compared to the previous quarter. However, the result was a lot lower, as it posted a rise of 0.2%.

The report stated that there were positive contributions from personal consumption expenditures (PCE) and private inventory investment, which helped the rise in the real GDP. On the other hand, there were negative contributions from exports, nonresidential fixed investment, and state and local government spending. The gross domestic purchases price index was down by 1.5% in Q1, which was a lot lower compared to the previous quarter fall of 0.1%.

The US Personal Consumption Expenditures report was also published by US Department of Commerce. The outcome was once again on the lower side, as it posted a decrease of 2% in first quarter of 2015, compared to the preceding quarter. Moreover, the Core Personal Consumption Expenditure managed to rise by 0.9% in Q1 2015, compared to Q4 2014.

Overall, the data was disappointing and weighed on the US dollar to some extent. The EURUSD pair spiked higher to 1.1080 and looks set for more gains in the near term.

Fed Interest Rate Decision

There is a major release today, as the Board of Governors of the Federal Reserve will announce the interest rate, which is likely to cause a lot of moves in the US dollar.

Futures for the Dow Jones Industrial Average fell by 90 points to 18,020 and the S&P 500 index declined by 10 points to 2,104.

 

Ben Myers

Ben Myers

Success = few pips, thousand times

Ben Myers is one of the most respected and trusted names in the financial trading industry. Following a long and successful career with HSBC, Bank of Ireland and running his own investment firm

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