By: Barbara Zigah
With better-than-expected GDP data out of the United States released yesterday, investors are eagerly awaiting further economic data to be released today before committing to higher-yielding currencies. The U.S. Commerce Department, in a communiqué issued yesterday, reported that the U.S. Gross Domestic Product rose 3.5% (annualized) for the 3rd quarter of 2009, the first time in more 12 months that it has been in positive territory. Following the issuance of the data, the U.S. Dollar Index, a gauge of the greenback’s value versus other major currencies, traded lower, not far off of the 14-month trough of 74.94 .DXY, established earlier in the month. It’s expected that the month will close out with the U.S. Dollar Index posting its 7th consecutive monthly decline.
Investors continue to be skeptical about a U.S. recovery, despite the GDP figures, and will monitor the data on consumer sentiment and manufacturing activity as an indicator of the country’s economic health. According to one foreign exchange analyst in Australia, positive numbers today could be the incentive investors need to move more heavily into high yielding currencies. Buttressing that remark, the Euro rose to $1.4844, a rise of .1% and continuing the .8% gain from yesterday.