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Dollar Rebounds On Fairly Strong Economic Data

Dollar Rebounds On Fairly Strong Economic Data

The U.S. dollar scored gains against most of its major rivals on Friday, rebounding fairly strongly after recent losses, reacting to some strong economic data.

Comments from St. Louis Federal Reserve President James Bullard that the Fed should start reducing its monthly bond purchases this fall and cut them “fairly rapidly” so the program ends in the first months of 2022 to pave the way for a rate increase that year if needed.

The Commerce Department released a report that showed an unexpected increase in personal income in the month of June. The report showed personal income inched up by 0.1% in June after tumbling by a revised 2.2% in May. Economists had expected personal income to dip by 0.3%.

Meanwhile, the data showed personal spending jumped by 1% in June after edging down by a revised 0.1% in May. Economists had expected personal spending to increase by 0.7% in the month.

Revised data released by the University of Michigan showed consumer sentiment in U.S. decreased by slightly less than initially estimated in the month of July. The report said the consumer sentiment index for July was upwardly revised to 81.2 from a preliminary reading of 80.8 but remains below the June reading of 85.5. Economists had expected the index to be unrevised.

The dollar index, which edged down to 91.78 in the Asian session, recovered gradually and climbed to 92.20 around mid afternoon and has been staying firm since then. At 92.14, the index is now up 0.3% from the previous close.

Against the Euro, the dollar firmed to $1.1864, from $1.1889. A flash estimate from Eurostat showed that eurozone gross domestic product expanded 2% sequentially, reversing the 0.3% drop posted in the preceding period. The growth rate was bigger than the expected 1.5%.

On a yearly basis, GDP rebounded 13.7% after shrinking 1.3% in the first quarter. GDP was forecast to grow 13.2%.

Separate data from Eurostat showed that Eurozone inflation rose to 2.2% in July from 1.9% in June. The rate was above the expected 2%.

The Pound Sterling shed ground against the dollar, dropping to $1.3897 a unit from $1.3961 Thursday evening.

Againt the Yen, the dollar climbed, fetching 109.72 yen a unit, compared to previous close of 109.49 yen a dollar. Industrial output in Japan advanced a seasonally adjusted 6.2% on month in June, the Ministry of Economy, Trade and Industry said. That beat expectations for an increase of 5% following the downwardly revised 6.5% contraction in May.

Against the Aussie, the dollar strengthened to 0.7340, gaining from 0.7396.

The Swiss franc slightly up at 0.9058 a dollar. A report from Swiss Economic Institute said the KOF Economic barometer in Switzerland fell to 129.8 in July, from a downwardly revised 133.2 in June. It is the second consecutive fall from a record value in May but the barometer remained clearly above the long-term average of 99.3.

The dollar retreated against the Loonie after showing some strength earlier in the day. It was hovering around 1.2475 a unit of the Canadian currency a little while ago, about 0.22% down from Thursday evening.

The material has been provided by InstaForex Company – www.instaforex.com