The US dollar is slipping today, heading mostly lower as the latest economic data disappoints. Concerns about the still-slow economic recovery continue are holding the greenback down right now.
Consumer spending in the United States fell for the first time in a year, with the US Commerce Department reporting that spending slipped 0.1 per cent last month. This news comes on the heels of an adjusted GDP report for the first quarter of 2014 that shows the economy shrank by 1 per cent. These facts mean that the Federal Reserve may not continue to taper its asset purchase program as soon as expected.
One of the complications to the situation is that inflation pressures continue to build. The Fed normally raises interest rates in response to inflation pressures, but without economic growth, that makes it difficult. The PCE price index rose by 0.2 per cent in April, and the government’s PCE index is at its highest annualize rate since 2012.
All of this means complications for the US economy and the US dollar. So, today, the greenback is heading lower against most of its counterparts.
At 13:41 GMT EUR/USD is up to 1.3630 from the open at 1.3602. GBP/USD is up to 1.6754 from the open at 1.6719. USD/JPY is down to 101.7940 from the open at 101.8005.
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