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Forex News: Dollar Extends Rally On Upward Revision To US

Dollar Extends Rally On Upward Revision To US GDP, Robust Private Payrolls

08/30/2017 - 09:19:00 (RTTNews)

(RTTNews) - The U.S. dollar continued to be higher against its key counterparts in the European session on Wednesday, as the U.S. private sector job growth outpaced forecasts in August and the economic growth was revised higher in the second quarter, boosting hopes for another rate hike by the Federal Reserve later this year.

Data from payroll processor ADP showed that private sector employment jumped by 237,000 jobs in August following an upwardly revised increase of 201,000 jobs in July.

Economists had expected employment to climb by 185,000 jobs compared to the addition of 178,000 jobs originally reported for the previous month.

A separate report released by the Commerce Department showed U.S. economic activity increased by more than previously estimated in the second quarter.

The Commerce Department said gross domestic product jumped by 3.0 percent in the second quarter compared to the previously estimated 2.6 percent growth.

Economists had expected a much more modest upward revision in the pace of GDP growth in the quarter to 2.7 percent.

At 9:15 am ET, Federal Reserve Board Governor Jerome Powell speaks on the role of boards at large financial firms in a Conference hosted by the Federal Reserve Bank of Chicago.

Investors focus on US nonfarm payrolls data, due Friday, for more clues about Fed policy outlook.

Economists forecast a job growth of 180,000 in August, with a jobless rate of 4.3 percent.

Meanwhile, Moody's Investors Service slashed U.S. growth forecast for this year and the next, citing poor performance in the first half and hopes for more modest fiscal stimulus than previously assumed.

The rating agency expects the economy to grow by 2.2 percent in 2017 and 2.3 percent in 2018, down from its prior forecasts of 2.4 percent and 2.5 percent, respectively.

The greenback rose against its most major counterparts in the Asian session, as worries over a North Korean missile launch appears to ease.

While U.S. President Donald Trump offered a surprisingly subdued response to the missile launch, the U.N. Security Council has condemned the missile provocation but stopped short of imposing new sanctions or other specific measures to rein in Pyongyang.

The greenback added 0.8 percent to hit a 5-day high of 1.1894 against the euro, after having dropped to 1.1984 at 12:15 am ET. The greenback is poised to test resistance around the 1.18 region.

Survey results from European Commission showed that Eurozone economic confidence reached its highest level in more than ten years in August.

The economic confidence index rose to 111.9 in August from 111.3 in July. The score was forecast to rise slightly to 111.3 from July's initially estimated value of 111.2.

The greenback that closed Tuesday's trading at 1.2917 against the pound firmed to a 2-day high of 1.2879. On the upside, 1.27 is possibly seen as the next resistance for the greenback.

Data from the Bank of England showed that the UK mortgage approvals increased to a 16-month high in July.

The number of mortgage approvals rose to 68,689 in July from 65,318 in June. This was the highest since March 2016 and above the expected level of 65,000.

The greenback spiked up to 110.44 against the Japanese yen, its strongest since August 16. The next possible resistance for the greenback-yen pair is seen around the 112.00 area.

Data from the Ministry of Economy of Trade and Industry showed that Japan's retail sales jumped a seasonally adjusted 1.1 percent on month in July.

That beat forecasts for an increase of 0.3 percent following the 0.2 percent gain in June.

The greenback hit a 5-day high of 0.9608 against the Swiss franc, following a decline to 0.9538 at 3:45 am ET. Further uptrend may take the greenback to a resistance around the 0.97 level.

Data from the UBS investment bank showed that Switzerland's consumption indicator suggests that private consumption is rising at a subdued pace in July.

The UBS consumption indicator came in at 1.38 points in July.

The greenback strengthened to a session's high of 0.7218 against the kiwi, from a low of 0.7278 hit at 12:00 am ET. The greenback is likely to find resistance around the 0.71 region.

Extending early rally, the greenback appreciated to a weekly high of 1.2569 versus the loonie. This may be compared to a low of 1.2501 hit at 12:00 am ET. Continuation of the greenback's uptrend may see it challenging resistance around the 1.28 mark.

Having fallen to more than a 4-week low of 0.7996 versus the aussie in the Asian session, the greenback firmed to 0.7926. If the greenback rises further, 0.78 is possibly seen as its next resistance level.

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