Wednesday saw the US dollar extend to 10 month highs against various other major currencies, following data on second quarter growth which highlighted that the economy bounced back strongly after a first quarter contraction. The Commerce Department report stated gross domestic product grew at an annual rate of 4%, outstripping forecasts of just under 3%. On top of this, personal consumption – predicted at 1.9% – grew well above predictions to 2.5%. The general consensus following Wednesday’s report is the U.S economic recovery is gaining momentum. We also saw over 200,000 jobs added to the US economy in July which was slightly under expectations but the third month in a row where the figure had exceeded 200,000. We also had the latest Federal Reserve meeting where the decisions were very much as expected; no change in interest rates and a further cut of US$10 billion in quantitative easing.
Looking to today, the most important release in the U.S. will be unemployment claims this afternoon. This will report the number of individuals who filed for unemployment insurance for the first time during the past week. Any surprises could cause shifts for the US dollar in currency markets