Forexlive Americas FX news wrap: US second quarter GDP gets an upgrade but USD gains fade


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Markets:

  • Gold up $19 to $2521
  • US 10-year yields up 2.9 bps to 3.87%
  • WTI crude oil up $1.54 to $76.06
  • S&P 500 flat at 5589
  • NZD leads, CHF lags

The US dollar got a big lift from GDP and initial jobless claims data, rising around 25 pips on most fronts but gaining a full cent against the yen. Those moves were outsized based on moderately stronger and lagging data, so they might have reflected repositioning and month end. There could also be a front-run of tomorrow’s PCE numbers given the hotter inflation revision in the GDP report, though that should factor into the June revisions, perhaps leaving a higher base for July to draw down on. Time will tell.

The seven-year sale delivered a slight tail but the market took that in stride in contrast to the larger moves on 2s and 5s earlier this week. Later in the day though, the US dollar began to give back gains and eventually gave back most of them, including 75 pips in USD/JPY from the highs.

That wasn’t the final move though as the US dollar got some late bids — particularly against the commodity currencies — on softening equity markets. Ultimately, the dollar finished near the best levels of the session against AUD, CAD and NZD, though still lower on the day.

This article was written by Adam Button at www.forexlive.com.

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