US Data Comes In Strong Backing Feds, Dollar Price Gains StrengthJanuary 31, 2023
The US dollar price has witnessed a strong and steady trading day against the major currencies from around the world.
The value of the dollar has edged significantly higher, especially, against the euro. This happened because a strong and steady pace has been recorded for the US economic growth.
The investors had been waiting for the fourth quarter economic data to come out of the United States. They were going to make their move for the dollar based on the economic data that was going to come out.
If the data were strong, it would mean that the Feds may remain hawkish against inflation and interest rates. That would help push the trading price of the dollar higher.
On the contrary, the Feds would not remain hawkish, suggesting that the value of the dollar may plummet.
The Feds Remain Hawkish
The latest data that has come out from the US economy clearly suggests that it is very strong. This has given a strong case to the Feds that they can continue staying hawkish against the interest rates.
They can do it for a longer period, which would keep providing more strength to the dollar price in the global forex market.
GDP Growth in the US
The latest economic data shows that the gross domestic product (GDP) figures are in the positive zone. It has reportedly grown stronger in the fourth quarter of 2022.
The graph shows that the GDP has surged by 2.9% in the respective quarter. The information has been shared by the Commerce Department of the United States.
As for the third quarter of 2022, the actual GDP that came out was 3.2%. The analysts at Reuters also shared their consensus on the fourth-quarter GDP estimations.
According to the analysts, the expectation of GDP growth was set at 2.6%. The actual GDP growth has been much higher than the forecast proposed by the Reuters analysts.
Data from Labor Department
The Labor Department has also shared a report on unemployment benefits in the United State.
Their latest data shows that for the week ending on January 21, the seasonally adjusted unemployment benefits count was set to 186,000.
The actual count that they have recorded in the particular week of 2023 shows that the actual figure is just 6,000.
Senior analysts from the United States have commented on the mixed economic data that has come out from the US markets.
Analysts are surprised to see that the performance of the US economy has been extremely astonishing. It has remained mainly resilient against rising inflation rates and economic downtrends.
Despite the monetary policy tightening that has resulted in interest rate hikes, the economy has managed to stay resilient and stable. This is a positive thing for the US economy as well as the US Feds.
They can continue hiking the interest rates without having to worry about the hikes causing much of an impact on the US economy.
The analysts have pointed out that it is mainly the inventories that have provided strength to the US economy. They have acted as a major contributor to the US economy and are continuing with it to this day.
Unfortunately, the contribution of the inventories is going to fade and face a major downtrend in the year 2023. The analysts claim that the downtrend will be witnessed throughout the year 2023.
This may cause turbulence in the economic data and force the Feds to make difficult decisions.
Dollar’s Strong Act against the Major Currencies
In the latest trading session, the dollar value has gained 0.23% strength against the euro. The euro is now down to $1.08895 against the dollar.
The dollar has shot up 0.54% against the Japanese yen, which now trades at 130.275 yen against every dollar. The dollar remained somewhat flat against the sterling while the Aussie dollar gained strength.