28, June 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The economy grew at a slower pace in the 1st quarter than it was expected as consumer spending and business investment data were reconsidered to lowering. There are signs that the pace of growth slowed in recent months. According to the third assessment presented by the Ministry of Commerce on Wednesday, the domestic product (GDP) gross which is the broadest indicator of all goods and services produced in the 1st quarter increased by 1.8% per annum.

GDP growth has been reconsidered to lowering compared with the previous estimates, and was lower than the forecasts who had expected GDP growth of 2.4% in the 1st quarter. The economy has grown for 15 consecutive quarters, but the pace of growth of about 2%, point to one of the weakest recoveries since World War II. In the 4th quarter of 2012, GDP grew by only 0.4%.

The U.S. dollar briefly fell against the Japanese yen, the euro and other major currencies after data showed that U.S. GDP growth for the 1st quarter was reconsidered to lowering due to pressure from weaker consumer spending and capital investment companies. Taking into account that the GDP data reports about the previous period of time, they are unlikely to significantly affect the debate on the collapse of the Fed bond purchases. But if the employment data, which is released next week, would also be worse than expected, the dollar could fall sharply.