The U.S. Dollar Index edged closer to a 9-year peak after it was reported that the last and final reading of third quarter. U.S. GDP was upwardly revised to 5.0%, an unexpectedly strong figure against expectations that growth would fall to 4.3%; the 5.0% (annualized) figure is the fastest quarterly pace on more than a decade. Tempering sentiment, however, was an unexpected decline in durable goods orders and personal inflation. Nonetheless, analysts say that the growth figures give Dollar bulls a reason to celebrate, and good reason to continue to buy the greenback.
As reported at 8:41 a.m. (GMT) in London, the U.S. Dollar Index was trading at 90.080 .DXY before retreating slightly to 89.8540 .DXY, a level not seen since 2005 and setting the Index on a pace to finish the year off with a gain of better than 12%. The EUR/USD pair was trading at $1.21.65, a 28-month trough, while the USD/JPY hit a session high of 120.82 Yen, approaching the 7-year peak struck earlier this month.
Oil Prices Whet Demand for Safe Havens
Analysts and investors expect that the U.S. Dollar, and indeed all of the safe haven currencies, could see continued interest as fallout from the ongoing decline in oil prices which is threatening the Russian Ruble and the Russian economy, sparking concerns that emerging markets could be at risk.