The dollar is stable on optimistic data on US economic growth

31.07.2015

On Friday, the dollar was steady against the euro and other major currencies as markets assess optimistic data on US economic growth, published in the previous session, and raised expectations of growth rates in the US in September.

EUR/USD has remained at 1.0937, rebounding from a one-week low 1.0892 on Thursday.

On Thursday, the Commerce Department reported that US gross domestic product grew at an annualized rate of 2.3% during three months to June. Growth for the first quarter was revised to 0.6% from the previously projected 0.2% reduction.

Although economists forecasted growth rate of 2.6%, the report indicates that the economy is showing a strong recovery.

Also, the US Labor Department said the number of Americans filing for initial jobless benefits in the week ending July 25 rose 12000 to 267000 from 255000 the previous week. Analysts had expected last week that the number of calls will increase by 15000 to 270000.

The data came after on Wednesday, the Fed said in a statement following the meeting that the economy and the labor market continue to strengthen, boosting hopes for an initial rate hike in September.

The Fed reported that it is watching the recovery of the economy after the recession in the first quarter and its "moderate growth" at the moment.

The Fed chief, Janet Yellen, said that the central bank may raise interest rates in September if the economy continues to improve the alleged rate.

The dollar was steady against the yen; USD/JPY pair was traded at 124.11 after the jump to a half month highs at 124.58 on Thursday.

In Japan, data showed that household spending declined by 3.0% in June, confounding the projected decline of 0.5%, after increasing 2.4% the previous month.

The data also showed that the consumer price index of Tokyo rose 0.2% in this month, which is in line with market expectations.

The USD index, showing the ratio of the dollar against a basket of major currencies, was kept unchanged at 97.55, having fallen from a one-week high from Thursday at 97.89.

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