Financial markets were quiet on yesterday, with only two days before the Christmas holiday. Financial Stocks drove the markets today and the U.S economy released better than forecasted reports, adding to signs the economy was improving, pushing US markets upwards.
GDP figures were the only negative in the forecasts today but that was a revision of prior quarter results, the U.S Department of Commerce announced the economy grew at slower pace than forecasted in the third quarter, as third-quarter growth was revised to 1.8 percent from 2.0 percent annual pace, below median estimates of 2.0 percent as well. A prior report said that health care spending increased at a $19.7 billion rate. Health care spending subtracted about 0.1 of a percentage point from the G.D.P. change in the final revision, whereas in the previous estimate, it added 0.61 of a percentage point to growth.
Despite the downward revision, the third-quarter growth is still a step up from the April-June period’s 1.3 percent pace. Part of the pickup in output during the last quarter reflected a reversal of factors that held back growth earlier in the year.
Other supportive news was the U.S Department of Labor report that the U.S jobless claims fell to the lowest level since April 2008, beating median estimates for the third consecutive week, while Michigan’s confidence rose more than forecast in December, in addition, the U.S Conference Board’s leading indicators climbed above projections in November.
A survey released on Thursday showed that consumer sentiment rose in December to its highest level in six months. And a gauge of future economic activity increased more than expected in November because of a sharp pickup in new permits to build homes.
But revised data showed that the nation’s economic growth was slower than previously estimated in the third quarter because of a sharp drop in health care spending. Stronger business investment and a fall in inventories pointed to a pickup in output in the current period.
Slight gains were seen in the currency markets today, but the biggest were mostly in the equities since demand for safe havens ebbed down. The U.S dollar erased an early gain after oil rose for the fourth consecutive day, euro and pound rose while the yen fell following strong economic reports about the U.S economic progress.
Meanwhile, the U.S dollar index eased below the opening level of 80.18 to trade at $80.18, recording the highest level of 80.138 and lowest level of 77.646. The EUR/USD pair inclined faintly from the opening level $1.3036 levels and currently steady at $1.3043 levels.
The GBP/USD pair traded above the cut at $1.5679 compared to the opening level of $1.5667, while the USD/JPY pair picked up slightly after opening at ¥78.08 levels and currently bottled up at ¥78.17 levels.
The US government’s count of first-time filings for unemployment benefits last week declined to 364,000. And, the Conference Board’s index of leading economic indicators rose 0.5% in November after a 0.9% rise the month before. Separately, the Thomson Reuters/University of Michigan’s final reading of consumer sentiment rose to 69.9 in December from 64.1 at the end of last month.