Dollar Holds Still Versus Euro Ahead Of Personal Spending Report

Sponsored Links

The dollar was on pause Friday morning in New York as traders continued to digest yesterday's stellar GDP data and looked ahead to figures on personal spending and income.

While the economy may be on the mend, much of the healing is likely due to government stimulus measures, and not the confident consumer, once the engine of the US economy.

The consumer will be in focus with this morning's personal spending data, set for release at 8:30 am ET.

Also on tap will be the final report on the consumer sentiment index for October from the Reuters/University of Michigan, which is scheduled to be released at 9.55 a.m. ET.

Yesterday, the Commerce Department said its advance estimate showed that GDP increased at an annual rate of 3.5 percent in the third quarter compared to a 0.7 percent decrease in the second quarter.

The dollar weakened the euro and sterling on the news, as traders flocked back to higher-yielding currencies on hopes the economic recovery has kicked in.

The buck managed to steady versus the euro Friday morning, holding near 1.4800. Its been a topsy turvy week for the dollar, which jumped more than 3 cents earlier in the week to move away from Monday's 14-month low of 1.5059.

German retail sales decreased for the second consecutive month in September amid weak domestic demand and private consumption.

According to a report released by the Federal Statistical Office on Friday, retail turnover in real terms decreased by an unexpected 0.5% in September from the previous month, compared to a 1.8% fall in August.

Meanwhile, UK house prices posted first annual increase in nineteen months in October, while rising for the sixth time on a monthly basis, the Nationwide Building Society said Friday.

With the data signaling the UK housing slump may have bottomed out, the dollar was unable to pare much of this week's losses versus the sterling. The dollar was near 1.6530 approaching 8 am ET, a modest improvement from yesterday's weekly low of 1.6603.

The buck continued this week's run of choppy trading versus the yen, bouncing back and forth around the 91 mark. Earlier in the month, the dollar tested a 1995 low of 87.08 before finding support.

The Bank of Japan announced its decision to maintain its key interest rate and to end the purchase of commercial paper and corporate bonds at the end of 2009 as scheduled, as it becomes necessary to conform to the changes in financial markets.

The Policy Board, led by Governor Masaaki Shirakawa, unanimously decided to leave the uncollateralized overnight call rate unchanged at 0.1% as expected.

(Market News Provided by RTTNews)