Dollar Climbing After Unexpected Upward Revision To GDP

The dollar is gaining ground against all of its major rivals Friday afternoon, following the release of several better than expected U.S. economic data. Investors cheered an unexpected upward revision to the fourth quarter GDP report, as well as strong reads on personal income, consumer spending and consumer sentiment.

U.S. economic growth in the fourth quarter of 2015 slowed by less than previously estimated, according to a report released by the Commerce Department on Friday. The report said real gross domestic product increased by 1.0 percent in the fourth quarter, reflecting an upward revision from the initially reported 0.7 percent growth.

The upward revision came as a surprise to economists, who had expected the pace of GDP growth to be downwardly revised to 0.4 percent.

Personal income and spending in the U.S. both rose by more than expected in the month of January, according to a report released by the Commerce Department on Friday.

The Commerce Department said personal income increased by 0.5 percent in January after rising by 0.3 percent in December. Economists had expected income to climb by 0.4 percent.

Additionally, the report said personal spending climbed by 0.5 percent in January after inching up by 0.1 percent in December. Spending had been expected to rise by 0.3 percent.

With revised data showing an uptick in the assessment of current conditions, the University of Michigan released a report on Friday showing that U.S. consumer sentiment deteriorated by much less than previously estimated in February.

The report showed that the final reading on the consumer sentiment index for February came in at 91.7 compared to the preliminary reading of 90.7. The upwardly revised reading still came in below January’s 92.0, although it exceeded economist estimates for an upward revision to 91.0.

The dollar has broken out to nearly a 1-month high of $1.0925 against the Euro Friday afternoon, from an early low of $1.1067.

Eurozone economic sentiment dropped to an eight-month low in February as weak global environment and financial market concerns weighed on optimism across almost all sectors.

The economic sentiment index fell for the second straight month in February, to 103.8 from a revised 105.1 in January, survey data from the European Commission showed Friday. This was the lowest score since June 2015 and below the expected reading of 104.3.

A measure of the current situation of the euro area economy remained almost stable in February, a report from the Bank of Italy and the Centre for Economic Policy Research showed Friday.

The Eurocoin indicator came in at 0.47 in February versus 0.48 in January. January’s reading was the highest since June 2011, when the score was 0.52.

Germany’s consumer prices in February remained unchanged from a year ago, defying expectations for a modest increase, preliminary figures from Destatis showed Friday. The flash consumer price index was unchanged, after rising 0.5 percent annually in January. Economists had forecast a 0.1 percent gain.

The French economy expanded more than estimated in the fourth quarter, revised data from the statistical office Insee showed Friday. Gross domestic product grew 0.3 percent sequentially instead of 0.2 percent at the end of 2015. The economy had expanded by a similar 0.3 percent in the third quarter.

France’s consumer price annual inflation unexpectedly turned negative for the first time in nearly a year during February, preliminary figures from the statistical office INSEE showed Friday. The consumer price index dropped 0.2 percent year-on-year, defying economists’ expectations for no change. The measure climbed 0.2 percent in each of the previous two months.

French consumer spending increased for the second straight month in January, in line with expectations, data from INSEE showed Friday. Consumer spending rose 0.6 percent month-over-month in January, slower than previous month’s 1.0 percent spike, which was revised up from a 0.7 percent climb reported earlier.

The buck has risen to a new multi-year high of $1.3865 against the pound sterling this afternoon, from a low of $1.4041 this morning.

Consumer confidence in the United Kingdom deteriorated in February, the latest survey from GfK revealed on Friday as its index score fell to 0. That was shy of forecasts for +3 and down from +4, and it marks a 14-month low score for the index.

England/Wales house prices grew at the fastest pace in fourteen months in January, figures from Land Registry showed Friday. House prices climbed 7.1 percent year-over-year in January, faster than the 5.5 percent rise in the previous month.

The greenback has climbed to a 1-week high of Y113.865 against the Japanese Yen this afternoon, from around Y112.800 this morning.

Overall nationwide consumer prices in Japan were flat on a yearly basis in January, the Ministry of Internal Affairs and Communications said on Friday.

That was in line with forecasts and down from 0.2 percent in December.

Core CPI also was flat, matching forecasts and down from 0.1 percent in the previous month.

The material has been provided by InstaForex Company – www.instaforex.com