US GDP Prints Poorly: USD Still Bullish
US GDP has printed even worse-than-expected, with the annualised four-quarter average falling from 2% to 0.7%. Non-annualised Gross Domestic Product four-quarter average fell from 1.3 to 0.8%. Other accompanying data releases were not particularly favourable either, with the Advance Goods Trade Balance deficit increasing marginally rather than a minor contraction.
A slew of mixed Eurozone data releases have seen the Euro soften, despite positive news from Spain, France and the Eurozone Consumer Price Index. The US Dollar is mostly strong ahead of today’s major data releases, which include annualised GDP.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: Soft Despite Positive CPI Figures
Eurozone Consumer Price Index figures printed better-than-expected, rising by 1% instead of the level of growth remaining steady at 0.9% as forecast. Non-core CPI increased 0.4% as forecast, after growth of 0.2% the previous month. It is just one of several positive Eurozone figures released today, which include Spanish GDP rising slightly to 3.5% and French GDP performing at its best rate for four years (1.3%).
Spain’s strong economic performance was sullied by accelerating deflation, with prices posting a loss of -1.9%, an increase of -1.6% on the previous month’s figures. German retail sales were up 1.5% year-on-year in December, although that represents a drop of -0.9% on the previous month’s figure and a result -0.4% worse than the forecast level. Sales dropped -0.2% month-on-month (MoM).
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0918.
The US Dollar to Euro (USD/EUR) Exchange Rate Forecast: Strong Performance from the ‘Greenback’ Ahead of GDP Release
The US Dollar has managed to weather a storm of negative sentiment as today’s GDP figures approach, advancing against several currencies. It is performing well against the Euro, Pound Sterling (GBP) and the Canadian Dollar (CAD), while sliding against the New Zealand Dollar (NZD) and Australian Dollar (AUD).
US Dollar-negative news is plentiful, with many warnings that the GDP figures will show that the US economy slowed towards the end of 2015, with the annualised GDP figure falling from the previous 2% level to hit 0.8%. Core Personal Consumption Expenditure is likely to have dropped from 1.4% to 1.2%, according to predictions. The fears regarding global pressures and the potential of a US housing bubble are rising, while Durable Goods Orders yesterday posted the largest drop in 16-months (-5.1%), sending gold prices climbing at the fastest monthly rate for 12 months.
The US Dollar to Euro (USD/EUR) exchange rate is currently trading between 0.9131 and 0.9183.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: US GDP on Tap
There is a slew of US data due out later today, including the key Gross Domestic Product and Core Personal Expenditure. The University of Michigan inflation forecasts will also be of interest, as will the Advance Goods Trade Balance. There is no Eurozone data left to be released before the weekend. Although a low-impact release, the Baker Hughes US Rig Count figures could have an impact on the price of oil if the number of rigs currently drilling for oil is shown to have remained steady or increased.
The Euro to US Dollar (EUR/USD) exchange rate is currently trading between 1.0882 and 1.0948.