US Dollar (USD) Exchange Rate Rallies to One-Month High After Positive Data Release
The US Dollar (USD) is currently trading against the British Pound (GBP) between highs of 0.5897 and lows of 0.5883, currently residing at 0.5889. Conversely the US Dollar to Euro (EUR) exchange rate is trending at 0.7434.
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The US Dollar has seen another positive day on Friday by way of positive Durable Goods Orders figures, which have exceeded economists’ forecasts.
The published figures show an attainment of 0.7%, in June, in comparison to the predicted 0.5%. Furthermore May’s figure disappointed at -1.0% after the demand for military equipment dropped dramatically.
Economist Gus Faucher commented: ‘This is consistent with broad increasing demand throughout the economy.’
As a result of such favourable figures the US Dollar has risen to its highest level in a month.
Mizuho bank representative Sireen Harajili stated: ‘The US Dollar continues to be doing a little bit better compared to other currencies. Mainly because despite the slight weakness in US data, it still outperforms what’s going on in Europe.’
However some economists’ were hoping for more from the US data after May’s negative performance.
Harajili continued: ‘The durable goods report wasn’t really as good as everybody was hoping to see. The non-defence capital goods excluding aircraft, that measure is a proxy for future business investment spending, and that fell 1% and last month’s figure was revised lower. That would indicate that business investment going forward may be on the softer side.’
Thursday saw the release of highly favourable unemployment figures for the US, which emerged as the lowest job-seeking numbers in eight years.
Initial Jobless Claims failed to meet the economists’ expectations of 310K, instead only showing 284K new job-seekers.
Moreover the figure for Continuing US Claims reached 2500K, much lower than the predicted 2510K. With such positive data the US Dollar is likely to rally, being bullish against other majors in the currency market.
Monday will see the release of US Composite and Services PMI, alongside Pending Home Sales figures which could encourage the ‘Buck’ to remain high if favourable.
Speculation surrounds the US Dollar with regards to interest rate hikes in the US.
Although Chairwoman for the Federal Reserve Janet Yellen has refused to conform with a specific timeframe or formula to when the rates will change; she appeared more hawkish in her latest semi-annual testimonies, suggesting hikes would be fuelled by positive data.
The Pound is currently trending at 1.6982 versus the ‘Greenback’, whilst the Euro has fallen to 1.3433.
For now it appears that the US Dollar could be set to continue gaining in the currency market as positive data supports it, outperforming economists’ forecasts.