Dollar Charges to Multi Week Highs on Strong US GDP Data

Talking Points:

- US Annualized GDP (3QA) beat analyst estimates with a headline reading of 3.5%.

- US Personal Consumption (3QA) falls just short of estimates at 1.8%.

-EURUSD falls 1.2547 before rebounding.

US Gross Domestic Product beat analyst estimates of 3.0% with a headline reading of 3.5%, which was 1.1% lower than the prior reading. The slowdown in GDP expansion is a modest reflection of a decrease in inventory investment and a lack of consumer spending. This slow down in US GDP could be indictive of Q3 retail performance, which could reflect the slowdown in personal consumption.

US Personal Consumption data fell below analyst estimates of 1.9% slipping to 1.8%. This small slowdown in personal consumption is a side effect of the slowdown in GDP expansion that has been noted over the past few headline readings.

Here’s a summary of the data this morning that’s contributed to US Dollar price action:

- Initial Jobless Claims (OCT25): 287K versus 285K expected, from 283K (revised to 284K).

- Continuing Claims (OCT18): 2384K versus 2352K expected, from 2351K (revised to 2355K).

- GDP Annualized (3QA): 3.5% versus 3.0% expected, from 4.6% (q/q).

- Personal Consumption (3QA): 1.8% versus 1.9% expected, from 2.5%.

-GDP Price Index (3QA): 1.3% versus 1.4% expected, from 2.1%.

-Core PCE (3QA): 1.4% versus 1.4% expected, from 2.0%.

See the US Dollar economic calendar for Thursday, October 30, 2014.

EURUSD 1-minute Chart: October 30, 2014 Intraday

Charts Created using Marketscope – prepared by Tyler Amend

EURUSD fell to 1.2547 on the back of a strengthening dollar before retracing all dollar gains and moving to an intraday high of 1.2607. This could be a reflection of a large amount of EURUSD short positions exiting the market. EURUSD is currently trading around 1.2602 at the time of this report.

--- Written by Tyler Amend, DailyFX Research