US Dollar Rallies On Economic Data (UUP)
The US Dollar (USD) finally moved higher after recent significant losses against the major currencies, boosted by today's unexpectedly positive economic readings. The second quarter GDP slightly beat the expectations, coming in at 1.7% vs. 1.6% expected, while personal consumption was 2.2% vs. 2.0% forecasted, and the initial jobless claims fell to 453 thousand from last week's 469 thousand. The most surprising number probably was the Chicago purchasing manager index, which beat the expectations by quite a margin, coming in at 60.4 while the general estimate was for 55.5.
All those positive numbers gave the Dollar a little room to breathe, as they showed some hope that the recovery is not all lost after all. At the same time, it puts under a question the general strong belief that the Fed will most definitely start QE 2 come the December meeting.
Since the numbers were released this morning, the Dollar was able to recover strongly from the lows against the Euro (EUR) and the British Pound (GBP), while moving higher against the Japanese Yen (JPY) as well. The EUR/USD fell from 1.3681 to as low as 1.3575 and currently is trading at 1.3610s. The GBP/USD pair, meanwhile, dropped from 1.5921 to 1.5693 and now trades just above 1.57.
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