The US dollar strengthened versus the euro as the GDP report showed that pace of economic growth in the US increased. The currency dropped against the Japanese yen as the growth was slower than the analysts predicted.
The US gross domestic product expanded at an annual rate of 3.2 percent in the fourth quarter of the last year, compared to the 2.6 percent growth in the third quarter. Even as the growth accelerated, it hasn’t met up the economists’ expectations of the 3.5 percent growth. The University of Michigan Sentiment Index showed an opposite behavior: its January reading of 74.2 was lower than the December reading of 74.5, but higher than the forecast value of 73.1.
The social unrest in Egypt was beneficial for the US currency as such event increased demand for safer assets, including the dollar. On the flip side, Egyptian tensions boosted some commodities, including crude oil and precious metals, and rally of commodities usually means a weaker dollar. So it’ll be interesting to see next week how events will unfold.
EUR/USD closed at 1.3608 after it opened at 1.3733. Friday was a single day of gains for the dollar versus the euro. USD/JPY erased on Friday gains of the previous day, tumbling from 82.92 to 82.12.
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