Fundamental analytics

US economy slowed in the fourth quarter, FX market is pulling back from weekly highs

It was a dramatic week, volatile and interesting. One of the few and rare weeks in the market, when it was easier to make money than to lose. Five days full of events and information. Well, we can sum up. After the decline of USD dollar almost throughout the week, when two major world regulators (the Bank of Japan and the ECB) left their monetary policy unchanged, US President Trump warned that the comments of his finance minister were pulled out of context, and in any case he supported a strong dollar. At the beginning of today's session, the decline in the American market resumed, the market took advantage of the recovery of the dollar to sell it at higher levels.

However, with the opening of US trading, the market took a breather and proceeded to a wider profit-taking, which determined the current recovery of the US currency. As WALL-STREET starts the Friday session  EUR / USD is retreating to the area of ​​1.1228, and the dollar index has gained in the region of the level of 89 points.

Today, the news flow in Asia has been relatively light. The main economic data of the day was Japan December CPI. Figures rose from 0.6% to 1.0%. The UK reported its first reading on GDP in the fourth quarter. It grew slightly more than expected, at 0.5%. Compared to the previous year, GDP fell to 1.5% from 1.7%. The British pound, which, like other major currencies during the week, showed rally against the US dollar, is consolidating on Friday's opening of the US stock markets, retreating from the highs of the week.

Today, the focus has returned to US statistics. Economic growth in the US unexpectedly slowed in the fourth quarter 2017, as the highest consumer spending for three years led to a sharp increase in US imports. Import, which is subtracted from GDP amount, grew at the fastest pace in more than seven years.

Gross domestic product increased by 2.6 percent year-on-year, while expectations were at 2.9 percent.

In 2017, the US economy grew by 2.3 percent, accelerating from 1.5 percent in 2016. Economists expect that the annual growth of US GDP this year will reach a 3 percent target level, which is partly due to the weak dollar, rising oil prices and the strengthening of the world economy.


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