The US dollar is surging against its major rivals on Friday, thanks to positive economic data and comments by one Federal Reserve official. The greenback is on a tear in 2018, despite several factors that would normally the hurt currency, and it will likely finish the year up roughly 5%. Will 2019 be as friendly to the buck?
The gross domestic product (GDP) was revised lower but it still came in strong in the third quarter. According to the Department of Commerce, third-quarter GDP growth was 3.4%, revised down from 3.5%.
Orders to US factories for long-lasting goods climbed at a modest pace in November, reports the US government. The Commerce Department said that durable goods orders increased 0.8% last month, after plunging 4.3% in the previous month. Researchers did warn that factory output may slow in the coming months, mainly because of the tariffs imposed on American goods and a weakening international economy.
It was further reported that US business investment in capital goods, like automobiles and industrial machinery, slowed in the second half of 2018, retreating from its strong first half.
Although the stock market appears to be facing a correction, consumer sentiment remains strong. The University of Michiganâs consumer-sentiment index lodged a final December reading of 98.3, up from previous estimates of 97.5.
Earlier this week, the Fed raised interest rates by 25 basis points to a target range of 2.25% to 2.50%. It also cut its number of planned rate hikes from three to two. As result, equities recorded triple-digit losses, leading New York Fed President John Williams to reassure investors that the central bank might reassess its plans for 2019.
We are listening, there are risks to that outlook that maybe the economy will slow further.
What weâre going to be doing going into next year is re-assessing our views on the economy, listening to not only markets but everybody that we talk to, looking at all the data and being ready to reassess and re-evaluate our views.
The US Dollar Index rose 0.27% to 96.66.
The USD/CAD currency pair advanced 0.37% to 1.3560, from an opening of 1.3508, at 15:09 GMT on Friday. The EUR/USD tumbled 0.31% to 1.1413, from an opening of 1.1446.
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