By: Barbara Zigah
Following Friday’s unexpectedly dismal growth report from the United States,, the U.S. Dollar continues to be under pressure as the new trading week unfolds in Asia. The greenback struck a new 2-month low against the Japanese Yen, trading at 80.10 Yen on the EBS trading platform before the USD/JPY pair recovered slightly to 80.18 Yen, still a decline of 0.1% from Friday’s N.Y. trading. The greenback also touched on an 8-month low against the Pound Sterling, despite the U.K.’s own growth issues; as reported at 1:22 p.m. (JST) in Tokyo, the Pound Sterling was trading at $1.6289, the highest price since August 2011, before retreating to $1.685, still a 0.2% gain.
Friday’s preliminary 1st quarter GDP data showed that the U.S. economy was in far worse shape than expected; analysts had been forecasting a decline in GDP but the actual number at 2.2% was well off economists forecasts of 2.5% growth and were attributed primarily to federal budget cuts. While the data supported the Fed’s commitment to enduring ultra low interest rates it also offered some hope to Fed watchers who believe this could be the impetus that the Fed said that they needed to see in order to begin another round of quantitative easing.