The US dollar is adding to its gains ahead of the Thanksgiving holiday as a plethora of mixed economic data impacted financial markets. The greenback has been one of the top-performing currencies in the world, buoyed by inflation fears and turbulence in the broader global economy. So, what did the data say in the middle of the trading week?
According to the Bureau of Labor Statistics (BLS), the number of Americans filing for unemployment benefits fell below 200,000 for the first time in 40 years. Continuing jobless claims fell to 2.049 million, while the four-week average, which removes week-to-week volatility, topped 252,000.
In the second quarter, the gross domestic product (GDP) growth rate was 2.1%, falling short of the median estimate of 2.2%. The GDP price index swelled a higher-than-expected 5.9%, while GDP sales were flat at 0% during the July-to-September period.
Personal income rose 0.5%, while personal spending advanced 1.3% in October. Both readings were higher than what the market had anticipated.
Durable goods orders slumped 0.5% in October, below economists’ expectations of 0.2%. Wholesale inventories climbed 2.2%.
On the inflation front, the personal consumption expenditures (PCE) price index, which is the Federal Reserve’s favorite inflation measurement, surged at an annualized rate of 5% in October. On a month-over-month basis, PCE prices advanced 0.6% last month. The core PCE prices advanced 4.5% in the three months ending in September. This matched what the market had penciled in before the metric’s release.
The housing market remained healthy as mortgage applications increased 1.8% in the week ending November 19, according to the Mortgage Bankers Association (MBA). New home sales eased to 0.4% to 745,000 residential properties.
Meanwhile, investors pouring into the traditional safe-haven asset continue to show their confidence in Federal Reserve Chair Jerome Powell’s re-nomination.
“Markets perceived the outcome as marginally hawkish, and futures now firmed up expectations for a hike in June from having been skewed toward July,” currency analysts at Brown Brothers Harriman said in a note on Tuesday.
In the aftermath of the data dump, the US Dollar Index (DXY), which measures the greenback against a basket of currencies, rose 0.31% to 96.79, from an opening of 96.53%. The buck is on track for a weekly gain of about 1%, adding to its year-to-date surge of 7.7%.
The US Treasury market was mostly green across the board, with the benchmark 10-year yield up 0.016% to 1.681%. The one-year bill edged up 0.013% to 0.206%, while the 30-year bond was unchanged at 2.023%.
The USD/CAD currency pair jumped 0.17% to 1.2693, from an opening of 1.2672, at 13:55 GMT on Wednesday. The EUR/USD dropped 0.39% to 1.1205, from an opening of 1.1250.