Kathy Lien is Director of Currency Research at GFT, and runs KathyLien.com.
Kathy has a Bachelors degree in Finance from New York University. Kathy has written for Stocks and Commodities, CBS Market Watch, ActiveTrader, Futures and SFO Magazine. She is frequently quoted on Bloomberg and Reuters and has taught seminars across the country. She has also hosted trader chats on EliteTrader, eSignal, and FXStreet, sharing her expertise in both technical and fundamental analysis.
Today’s US economic reports told us a lot about nothing. There were signs of weakness even in the stronger releases which explains why the dollar gave back some if its earlier gains against the euro.
US growth figures for the second quarter were revised lower, but this is hardly surprising given the recent trend of economic data. Weaker residential investment growth played a major role in the downward revision which suggests that housing could continue to drag the economy lower in the third quarter.
Although the US dollar's performance today has been very mixed, with strength seen against the euro but weakness against the Japanese yen and British pound, the mood of the day is certainly more dollar bullish than bearish.
The US dollar is much weaker today against its counterparts. Even though the Federal Reserve repeated that inflation risks remain, they probably only did so to temper the more bearish change that they made to the statement which was to say that they no longer see the slowdown in the housing market as gradual.
As expected Federal Reserve officials kept the benchmark interest rate at the current 5.25 percent, for the second month, leaving the potential for further rate hikes in the near term in subsequent statements.
The markets saw more economic data to purport the current sentiment that interest rates are likely to remain at the current 5.25 percent for the rest of the year, driving mixed results on the session.
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