The US dollar enjoyed a spike against several currency rivals at the end of the trading week, driven primarily by a higher final reading of the gross domestic product in the third quarter. The buck was further lifted on a decline in the cost of manufacturing goods consumed at home and exported to foreign markets.
According to the Bureau of Economic Analysis (BEA), the US economy expanded by an annualized 2.1% in the July-to-September period. The final reading is a 0.2% improvement from the initial Q3 GDP estimate of 1.9%. The upward revision was due to better consumer spending, which was then offset by weaker business investment. Higher exports, government spending, and residential investment also goosed the numbers.
The GDP price index, which measures inflation in the production of goods, came in at 1.7%, down from 2.6% in the second quarter.
In other data, the personal consumption expenditure (PCE) prices clocked in at 1.5%, down from 2.4% in the April-to-June period. Third-quarter corporate profits edged up just 0.6%, down from the 3.7% surge in the previous quarter.
Following the release of the revised figures, the US Dollar Index soared 0.2% to 97.57, from an opening of 97.40. The index, which measures the greenback against a basket of currencies, is poised for a weekly gain of 0.5% and a 1.5% advance for 2019.
Financial markets are expected to enjoy some certainty in 2020 as the two major trade agreements will soon be approved. Treasury Secretary Steven Mnuchin confirmed that phase one of the US-China trade deal is currently going through a technical review process and the full details will be released in January. The USMCA, despite some detractors in the House and Senate, will be signed into law by the end of January.
Chief White House economic adviser Larry Kudlow thinks the trade pacts will add about 0.5% to GDP next year. The experts forecast GDP will slump to 1.5% in 2020, down from the estimated 2.3% expansion in 2019.
The USD/CAD currency pair surged 0.28% to 1.3165, from an opening of 1.3127, at 12:50 GMT on Friday. The EUR/USD tumbled 0.27% to 1.1092, from an opening of 1.1121.
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US Dollar Spikes on Higher Q3 GDP Reading
