Dollar Mixed After U.S. GDP Data
The U.S. dollar was trading mixed against its major counterparts in the European session on Tuesday, after a data showed that the U.S. economy grew slightly more than previously estimated in the third quarter of 2020.
Data from the Commerce Department showed that the spike in gross domestic product in the third quarter was upwardly revised to 33.4 percent from the previously reported 33.1 percent. Economists had expected the jump in GDP to be unrevised.
The Commerce Department said the unexpected upward revision primarily reflected larger increases in consumer spending and non-residential fixed investment.
Congressional leaders approved a $900 billion relief package on Monday and a $1.4 trillion government spending bill to keep the government running until December 28.
The package includes temporary $300 per week supplemental jobless benefit and a $600 direct stimulus payment to most Americans.
The package was passed by the Senate in a 92-6 vote, following the House’s passage earlier on Monday.
The greenback advanced in the previous session, as concerns about the spread of the covid variant weighed on sentiment.
The greenback dropped to a 4-day low of 1.2257 against the euro, from a high of 1.2204 seen at 5:00 am ET. The pair had closed Monday’s deals at 1.2241. The greenback is seen finding support around the 1.25 level.
Survey results from the market research group GfK showed that German consumer confidence is set to fall in January due to the severe lockdown measures introduced to withstand the second wave of Covid-19 infections.
The forward-looking consumer sentiment index fell to -7.3 in January from -6.8 in December. The score was forecast to drop to -8.8.
The greenback eased off to 1.3447 against the pound, after rising to 1.3362 at 5:00 am ET. The GBP/USD pair had finished yesterday’s trading session at 1.3458. If the greenback falls further, 1.38 is possibly seen as its next support level.
Data from the Office for National Statistics showed that the UK economy rebounded at a faster than estimated pace in the third quarter, reflecting the effects of the easing of lockdown restrictions and also some recovery of activity from the steep contraction in April.
Gross domestic product grew by a record 16 percent sequentially instead of 15.5 percent expansion estimated previously. GDP had fallen by revised 18.8 percent in the second quarter.
The greenback held steady against the franc, after having fallen to 0.8845 at 7:15 am ET. At Monday’s close, the pair was valued at 0.8855.
The greenback rebounded to 103.50 against the yen, from a low of 103.28 set at 7:15 pm ET. The pair was worth 103.29 when it ended deals on Monday. The next possible resistance for the greenback is seen around the 105.00 level.
U.S. consumer confidence index for December and existing home sales for November are due at 10:00 am ET.
The material has been provided by InstaForex Company – www.instaforex.com