The dollar strengthened against most of its peers today following the release of US GDP figures which were better than forecasts and with the Fed ending its bond buying program adding to market consensus that it will increase rates in 2015. 3rd quarter GDP increased at an annual rate of 3.5% while a rate of 3% was expected. The report highlighted that consumer spending wound down to 1.8% from 2.5% in the previous quarter with fixed investment spending also declining from the same period so the dollar did not surge on the data.
The pound and the euro weakened against the dollar following the release of the US GDP report. Figures released out of the euro zone showed that German inflation remained at 0.7% in October from the previous month setting a 5 month low. Germany?s unemployment rate stayed at 6.7% in October from the previous month while the number of unemployed people was forecast to increase by 5,000. The euro was weaker against the pound and the yen.
The yen was weaker against the dollar following the release of US growth figures with the pair breaking its 109 handle. The yen was stronger against the euro and weaker against the pound. Tomorrow Japan is set to release data on household spending and its consumer price index. The Bank of Japan will also release its decision on monetary policy and its interest rate statement.
The Australian and New Zealand dollars strengthened against the dollar while the Canadian dollar weakened against the dollar. The New Zealand dollar regained lost ground against the dollar on the back of an announcement from the Reserve Bank of New Zealand which kept its interest at 3.5% adding that more time is needed to review the economy before changes to policy are made after previously stating that stricter policy would be required.
Tomorrow the US is set to release figures on personal income and expenditure along with amended numbers on consumer sentiment.
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