Dollar steady after GDP slump

Investors got a sense of how the Covid lock-down has impacted GDP as data released today showed the US economy contracted at an annualized rate of 32.9% in the second quarter. This period accounts for the April and May shelter-in-place orders that impacted large parts of the country. The dollar held steady after the release and is higher versus the euro, Canadian dollar, and Japanese yen.

“You may have to fight a battle more than once to win it.”
Margret Thatcher
  • FX Rates
    July 30, 2020

    Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.


  • USD

    The dollar was higher ahead of GDP data on profit taking on short positions after Wednesday’s FOMC meeting. Jobless claims rose 1.4 million which was in-line with expectations and represents the second week in a row initial claims have increased over the prior week since March. Second quarter GDP plunged a record amount, -32.9% annualized versus -34.7% expected.

    GBP

    GBP/USD gained above 1.30 driven by a slump in the EUR/GBP and is the only currency trading higher versus the dollar today.

    EUR

    The euro retreated from its 22-month high driven by profit taking and German preliminary GDP data showing a 10.1% slump for the quarter.

    CAD

    The Canadian dollar fell ahead of US GDP data release and a 1.9% decrease in WTI oil prices.

    ASIA/PACIFIC

    USD/JPY is around 105 after Japanese Finance Ministry officials said they will watch the FX markets with a sense of urgency.

    Dollar-yuan broke through the psychologically important 7.00 barrier and the growing tensions between China and the US are closing the door for prospects of a rally ahead of the US election.

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Kathryn Garvey
WRITTEN BY
Kathryn Garvey

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