The U.S. dollar was seen posting strong gains over the week after the greenback fell early on into the week.
This article is originally referred from Orbex Market Review.
Economic data was mostly supportive about the U.S. economy which also helped to support the USD.
The euro was seen easing back strong gains towards the latter half of the week as the USD managed to gain on the back of the end of month flows.
Elsewhere the economic data over the week was mostly subdued.
The markets will be looking to a new trading week with lot of economic data available for the week ahead.
U.S. GDP in the second quarter revised to 4.2%
Economic activity in the United States was seen rising more than initially estimated for the three months ending June 2018, data released by the Commerce department showed on Wednesday last week.
The data underlined the strong economic growth that the U.S. is currently experiencing.
The official report showed that the real gross domestic product increased 4.2% in the second quarter of the year.
This was higher than the initial reports of a 4.1% increase.
The data also beat the forecasts where economists forecast that GDP would be revised down to 4.0%.
The unexpected revised GDP growth in the second quarter reflects a significant acceleration from the 2.2% GDP growth that was registered in the first quarter of the year.
The second quater revised GDP figures also marked one of the fastest pace of growth since the jump of 4.9% in the third quarter of 2014.
The U.S. Commerce Department noted that the stronger than expected growth was reflected by an upward revision to the non-residential fixed investment and also the increase in the private inventory investment.
There were also some downside revisions which included the consumer spending. Consumer spending revised down from the previously estimated 4.0% growth to 3.8%.
For the second quarter, growth in consumer spending reflected a strong acceleration from the 0.5% increase seen during the first quarter.
Consumer prices in Japan seen flat in July
Inflation rate in Japan was seen staying steady in July despite higher energy costs.
However, inflation was still below the BoJ’s 2% inflation target rate, data showed last week.
The BoJ’s measure of core inflation was seen rising 0.5% on the year in July.
This was slightly higher than the forecasts of 0.4%.
The BoJ’s core inflation data was close to the national core inflation which was seen rising 0.8%.
Core prices were seen rising for the nineteenth consecutive month as the index rose to 100.9 from the base level of 100.00.
Utility prices were the main driver with electricity, gas and other energy products registering an increase.
Price of hospitality also increase while to the downside, durable household items and cost of housing declined.
Lack of structural economic reforms from the government has kept consumer prices flat.
The Bank of Japan had last month tweaked its monetary policy where it said that it would take years for inflation to hit the 2% inflation target rate.
ECB Chief economists cites policy risks must be monitored
The European central bank’s chief economist Peter Praet, speaking at an event in Cologne noted that the central bank’s monetary policy was successful in stablizing the euro area economy.
He however said that policy makers must still remain patient and persistent and closely monitor the risks.
“Monetary policy has been effective in stabilizing the euro area economy and creating
conditions for a sustained adjustment of inflation towards below, but close to, 2 percent over
the medium term,”
Praet said in a speech in Cologne, Germany.
The chief economist attributed the achievement of the central bank to its regulation and supervision.
“Patient, prudent and persistent monetary policy is still needed,”
Praet said in his speech.
The chief economist’s comments as the European Central bank is expected to meet in a few weeks.
The ECB, in its monetary policy decision in June signaled that it would cut its bond purchases by half to 15 billion euro.
The ECB is eventually expected to end its bond purchases by end of December 2018.
The next central bank meeting is due later in September.
Original Source: Orbex Market Review