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Dollar Continues to Advance on GDP Growth

January 29, 2010 by

The dollar touched a new record for 2010 versus the euro as a quarterly gross domestic product report published today surprised traders with actual figures coming considerably above forecasts, suggesting that the U.S. economic recovery is accelerating, and allowing the dollar to post a weekly gain versus a less attractive euro due to some Eurozone member countries rising budget deficits. Currently EUR/USD is falling at 1.3913, the lowest rate for 2010 so far.

U.S. GDP figures increased at an annual rate of 5.7% in the last quarter of 2009 from the third quarter, according to the “advance” estimate released by the Bureau of Economic Analysis. These figures surprised forecasts positively as they expected a less significant growth of 4.5%. In the third quarter, the GDP grew 2.2% from the second quarter.

Chicago PMI advanced to 61.5 in January from a previous revised rate of 58.7 and for another month above forecasts that expected 57.3.

Michigan Consumer Sentiment index rose to 74.4 in January from a previous reading of 72.5 in December. Forecasts expected this index to be below actual figures but also showing improvements at 73.1.

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