THE TAKEAWAY: US economy grew stronger than anticipated > Initial claims remain near yearly lows > Personal consumption figures beat > Big picutre: US consumer is resilient and an improving labor market is supporting a broader recovery > USDOLLAR BULLISH
A strong round of top tier US data has the US Dollar building on its gains from earlier in the day. The headline 2Q’13 GDP figure was revised higher to +2.5% from +1.7%, beating expectations and settling fears that the world’s largest economy slowed into midyear.
With the US economy growing in line with the Federal Reserve’s forecasts from June, there is reason to believe that the Fed will move ahead with its plan to reduce the pace of QE3 next month.
Coming in at 331K, Initial Jobless Claims slightly beat estimates of 332K. Initial Jobless Claims, released on a weekly basis, measures the number of Americans who have filed for unemployment benefits. In a market where participants are judging all data in the context of an upcoming Fed taper, better prints (fewer claims) suggest that a reduction in asset purchases is likely and therefore is supportive of the US Dollar.
Here are all the figures pushing up the buck on Thursday:
- GDP (Annualized) (2Q S): +2.5% versus +2.2% expected, from +1.7%
- Personal Consumption (2Q S): +1.8% versus +1.7% expected (q/q)
- Initial Jobless Claims (AUG 24): 331K versus 332K, from 337K (revised higher from 336K)
- Continuing Claims (AUG 17): 2989K versus 2988K, from 3003K (revised higher from 2999K)
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) 1-minute Chart: August 28, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
--- Written by Christopher Vecchio, Currency Analyst and Gregory Marks, DailyFX Research
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