U.S. Economy Grows Faster Than Expected

The U.S. economy grew faster than initially thought in Q3, touching its best performance in two years, amid solid consumer spending. According to Commerce Department, the U.S. gross domestic product (GDP) increased at a 3.5% annual rate instead of the previously reported 3.2%. 

The Greenback was roughly flat as traders took profits after its rise to a 14-year peak earlier this week. The U.S. dollar index settled at 103 pips and could settle by the end of the week. 

Gold prices declined to support of $1,130 negatively affected by the number of people filing for unemployment benefits. Technically, it could decline further to $1,122 during the day.  

The number of Americans filing for unemployment benefits rose 21k to a seasonally adjusted 275k for the week ended 17th December. However, the figure rose to a six-month high, but remained below a level that is associated with labor market strength.

The Greenback settled vs. JPY and traded at ¥117.50 as Japan's cabinet approved a record 97.5 trillion yen ($830 billion) spending budget for the fiscal year starting on 1st April 2017. Japan implemented a policy based on low interest rates and a weak yen to limit borrowing, underscoring the challenge Tokyo faces in controlling the industrial world's largest debt burden.

Euro pared its gains vs. USD yesterday and traded at $1.0436. 

Oil prices settled yesterday due to low liquidity caused by Christmas and New Year holidays. U.S. crude traded at $52.60 and could move widely during the day.

The most important economic events:

• CAD Gross Domestic Poduct (YoY) (OCT): (GMT 15:30) – Important – Forecast (1.8%) – Previous (1.9%).
• USD U. of Michigan Confidence (DEC F): (GMT 15:30) – Medium – Forecast (98) – Previous (98%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.