Dollar Slips as Analysts Warn Pain Ahead for ‘Sugar-High’ Economy By

© Reuters. The dollar fell against rivals Friday. – The dollar languished near session lows, pressured by falling U.S. bond yields as analysts downplayed the strong third-quarter U.S. economic growth Friday, warning the “sugar-high” economy was set for a bumpy road.

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.25% to 96.

increased at a 3.5% annual rate in the July-September period, the Commerce Department said in its preliminary estimate on Friday, topping economists’ estimates for a 3.3% increase.

U.S. fell following the report, pressuring the dollar, as a deeper look into the report signaled growth could be set for bumpy road ahead as the tailwinds from President Donald Trump’s tax cuts wear off.

Disappointing business investment suggested “the boost in capex from tax cuts and deregulation was likely front-loaded and fading quickly,” BNP Paribas (PA:) said. “We continue to expect growth to slow from here as the sugar high in consumer spending turns into a sugar low.”

The dollar was also held back by a rebound in both sterling and the euro from session lows.

rose 0.12% $1.2833 from a fresh two-month low of $1.2778. The early-session pressure in the pound was attributed to growing doubts about whether the UK and the European Union can reach a consensus on a Brexit deal, amid divisions within UK Prime Minister Theresa May’s Conservatives Party concerning the best approach to restart Brexit talks.

“Politics at home the biggest stumbling block for the pound,” ING said. “Until this is resolved, we expect GBP/USD to trade below $1.30,” it added.

rose 0.18% to $1.1385 from a session low of $1.1336.

A rout in global markets in the wake of weak quarterly earnings from major U.S. corporates propped up demand for safe-haven yen, keeping a lid on gains in the greenback.

fell 0.35% to Y112.05.

rose just 0.08% to C$1.3083 as rising oil prices firmed up the loonie, weighing on the pairing.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *