Dollar Demonstrates Weakness After GDP Report

The US dollar fell yesterday against its major peers on signs that economic recovery in the United States is faltering. The currency extended its decline versus the Japanese yen today but stayed flat versus the euro and the Great Britain pound.
US gross domestic product shrank as much as 2.9 percent in the first quarter of 2014 from a year ago according to the final estimate. The reading was far worse than the previous estimate of a 1.0 percent drop and the analysts forecast of 1.8 percent decline. On top of that, durable goods orders fell 1.0 percent in May, while forecasters predicted just a minimal drop by 0.1 percent.
The data was very poor, especially the GDP report, triggering a dollar sell-off. Yet some experts argue that it should not mean a significant softness for dollar, pointing out that the GDP data does not reflect recent developments in the US economy.
EUR/USD traded at about 1.3632 as of 00:51 GMT today after rising from 1.3606 to 1.3629. GBP/USD ticked up a little from 1.6983 to 1.6990 after trading sideways yesterday. USD/JPY dropped from 101.86 to 101.70.

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