Friday, March 25, 2016

Forex trade muted as Easter holiday begins

US 100 dollar notes are seen at a bank in this picture illustration. (REUTERS/Lee Jae-Won/Files)

NEW YORK: Foreign exchange trading was muted on Friday (Mar 25) as many markets were shuttered for the Easter holiday, but the dollar earned a boost from a better-than-expected upgrade of fourth quarter US growth.

The dollar pushed up to US$1.1164 per euro at 2200 GMT, and ¥113.08, after the final estimate of GDP for the last quarter of 2015 came in at 1.4 per cent, much better than the 1.0 per cent previously estimated.

The revision showed consumer spending and housing sales were better than originally thought, and the slowdown in exports not as bad, as the year closed.

The implication was a US economy with stronger underpinnings that economists expect to pick up by the second half of this year after the oil sector bottoms out.

"The final look at the 2015 GDP growth underlines the key dynamics of the economy: consumer spending and housing are keeping the economy going, despite major drags from net exports, capital spending and an inventory cycle," said Nariman Behravesh, chief economist at IHS.

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