The U.S. dollar gained strength against the pound this morning on positive reports out of the U.S. Department of Labor. The report showed initial jobless claims filed last week fell by 18,000.
The U.S. dollar is slipping ahead of the Wednesday’s Federal Reserve policy meeting as traders look to the meeting for signs and clues on the direction the Federal Reserve will take with its momentary policy.
The hangover from last week Friday’s disappointing U.S. Q1 GDP growth fueled expectations for the Federal Reserve continue it bond buying program and even additional easing. As a result the British pound begins the week at level not seen since mid-February against the U.S. dollar.
A tug-a-war between the U.S. dollar and Japanese yen that has kept the currency pair in tight range this week has the yen pulling ahead into the weekend.
The U.K. pound gained over 1% this morning against the U.S. dollar after U.K’s GDP expanded by 0.3% beating expectations of 0.1%. U.K avoided a triple dip recession by posting growth this past quarter.
Ahead of the bell gold futures jumped as much 1.8% after economic data indicated that U.S. dropped 5.7% unexpectedly items for the month of March and core orders which excludes transportation items dropped by 2.8%.
Renewed global economic concerns after China report disappointing HSBC Flash Manufacturing PMI results of 50.5 and Germany’s PMI results disappointed with results of 49.2 indicating contraction. Remember the 50 mark is the line in the sand that represents contraction or growth.
I wanted to provide a quick update on trade that keeps giving as we begin a new week of trading. The U.S. dollar continued its move higher during the Asian session and remains basically flat during the start of the U.S. session the as pair approaches the 100.00 level.
As we head into the weekend and this final session of the week traders find U.S. dollar against the Japanese yen jumped 1.20%. The yen moved sharply lower on the news on Finance Minister Taro Aso new monetary easing where unopposed at G20 meeting held in Washington DC.
Official economic data from the U.K. indicated Consumer Price Inflation Index remained unchanged at rate of 2.8% for the month of March, in line with economist estimates.