Stock Market Watch

Forex Market Update: Dollar Index Rises sharply After Solid Economic Data

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The U.S. dollar turned sharply higher against all major traded currencies on Thursday after two closely followed economic indicators showed that the world’s largest economy was recovering, which could prompt the Federal Reserve to soon begin the tapering of its multi-billion dollar bond buying program.

At last check, the Dollar Index, a measure on U.S. dollar’s performance against a basket of six major traded currencies, rose 0.63% to 81.95.

The WSJ$ Index, which used slightly broader indexing criteria, was last up 0.52% to 74.23

The Commerce Department’s revised reading on the second quarter GDP showed that the U.S. economy expanded at a faster-than-expected pace. According to the second reading, the U.S. GDP grew by 2.5% in the second quarter while economists had forecasted 2.2% growth.

The Labor Department said that weekly first time jobless applications fell 6,000 to seasonally adjusted 331,000, which is near six year low level.

Now, the next big data which could provide more clues over when could the Fed start to squeeze its bond buying program is the monthly non-farm payrolls report, slated to be released next week. If the data suggests that the labor market is showing significant improvement then the Fed might start scaling down its economic stimulating measures.

Concerns over Syria also supported the U.S. dollar. Although the U.S. and its allies softened their stance on Syria, the situation still remains tense, which will prompt investors to retain some exposure in the currency.

 








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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