Investing.com – The dollar consolidated near its peak of 2019 in early trading Friday, showing no sign of weakening after a week of data and actions of the central bank who have underlined the relative strength of the u.s. economy, at least for the moment.
At 10: 00, the Dollar Index, which measures the greenback against a basket of six major currencies, was 98,16, down 0.05% compared with the peak of 98,32 achieved overnight.
The Euro was at 1.1138 USD, after drifting to 1.1125 USD per night, while the British Pound was at 1.2909 USD, after having briefly fallen to a minimum of two weeks to 1,2867 USD Wednesday because of growing signs of political instability following the election campaign of the EU.
Trading is expected to remain relatively modest in anticipation of the big release of the day, the gross domestic product to US in the first quarter, which is expected at 14: 30. The consensus forecast to an annualized growth rate of 2.0%, down from 2.2% in the fourth quarter of last year.
Even if this would represent the lowest rate since the middle of 2017, the analysts seem confident that the passage of the Federal Reserve monetary policy to more neutral, abandoning in reality the intention to raise interest rates this year, was enough to ensure that the growth does slow down more.
The avoidance of any escalation of the trade conflict between the United States and China has also played a major role, even if a final agreement resolving the dispute is still not acquired.
For some, the risks to the number of titles are on the rise. Analysts at ING underline that the modeling tool GDP NOW to the Federal Reserve of Atlanta, which seeks to provide an updated estimate of growth trends, suggests that the annualized growth rate could reach 2.8%, thanks to strong retail sales, construction, and – more recently – manufacturing numbers.
The fears related to the growth and inflation continue to keep the pressure on certain emerging market currencies. The argentine Peso fell again Thursday after a new opinion poll suggesting that the former president Cristina Kirchner would beat the incumbent president Emmanuel Macri in a second round later this year. Despite the IMF rescue, Macri has been struggling to control inflation and the markets are now forecasting a probability of two-thirds of a new default in the country.
In Turkey, meanwhile, the Lira approach 6 for a dollar after the central bank abandoned the speech which promised further increases in interest rates to defend the lira in its monetary policy statement on Thursday. A new decrease of foreign exchange reserves of the country also contributes to the problems of the lira.
The Russian central bank is expected to keep its refinancing rate unchanged to 7.75% when it meets later, despite a strong support of the Ruble to the highest of Oil over the last few weeks.