The U.S. dollar continued to hold its weekly gains overnight ahead of the much-anticipated first quarter GDP data.
Overview
The headline reading was very impressive as the U.S. economy expanded 3.2%, beating expectations of a 2.3% reading. As recently as last month, economists were calling for growth to be held under a percent, pointing to the government shutdown as a major headwind.
While the dollar initially strengthened further following the data, the move was short-lived. Indeed, the greenback is falling across the board in early trading. The PCE deflator failed to meet expectations and showed weak inflation data. And while personal consumption beat expectations (1.2% v. 1.0), it was considerably lower than the quarter prior (2.5%).
Later this morning, the University of Michigan consumer sentiment print will cross the wire.
What to Watch Today…
- University of Michigan at 10 a.m.
Complete Economic Calendar can be found here.
JPY
The Japanese yen gained overnight, stopping a recent slide. Golden Week, a ten-day holiday, begins tomorrow, which has sparked fears of a potential “flash crash.” Bloomberg reports that retail investors are said to be buying yen to protect themselves, contributing to the yen’s gains. The next available value date to deliver JPY is May 7th.
NZD
The New Zealand dollar is in recovery mode after falling to a three-month low versus the greenback yesterday. The Kiwi found strength after the Reserve Bank of New Zealand’s Governor Adrian Orr said he “wasn’t particularly worried” about the recent slowdown in economic growth. The currency also found support after data showed the highest trade surplus in eight years.
