Strong U.S. GDP Data Lifts U.S. Dollar

(RTTNews) - The U.S. dollar advanced against its most major counterparts in the European session on Thursday, as the economy expanded more than forecast in the fourth quarter, reducing concerns over a recession amid the Fed's attempts to cool inflation.

Data from the Commerce Department showed that U.S. economic activity surged by more than expected in the fourth quarter of 2022.

The report said real gross domestic product shot up by 2.9 percent in the fourth quarter after spiking by 3.2 percent in the third quarter. Economists had expected GDP to jump by 2.6 percent.

Separate data showed that U.S. durable goods orders surged much more than expected in December.

The Commerce Department said durable goods orders spiked by 5.6 percent in December after tumbling by 1.7 percent in November.

Economists had expected durable goods orders to surge by 2.5 percent compared to the 2.1 percent slump that had been reported for the previous month.

Data from the Labor Department showed that first-time claims for U.S. unemployment benefits unexpectedly dipped in the week ended January 21.

The report said initial jobless claims edged down to 186,000, a decrease of 6,000 from the previous week's revised level of 192,000

The dip surprised economists, who had expected jobless claims to rise to 205,000 from the 190,000 originally reported for the previous week.

The greenback climbed to 130.34 against the yen, from a 6-day low of 129.02 seen at 11:15 pm ET. The pair had closed Wednesday's deals at 129.52. The greenback is seen finding resistance around the 133.00 mark.

Data from the Bank of Japan showed that Japan producer prices climbed 1.5 percent on year in December - shy of expectations for an increase of 1.6 percent and slowing from 1.7 percent in November.

On a monthly basis, producer prices rose 0.1 percent, easing from 0.2 percent in the previous month.

The greenback advanced to 1.0873 against the euro, after falling to more than a 9-month low of 1.0930 at 1:45 am ET. The pair was worth 1.0912 when it closed deals on Wednesday. Next key resistance for the greenback is likely seen around the 1.07 level.

The greenback edged up to 1.2360 against the pound, reversing from a 3-day low of 1.2430 it logged at 3:15 am ET. The pound-greenback pair had ended yesterday's trading session at 1.2398. The greenback is likely to face resistance around the 1.21 region, if it gains again.

In contrast, the USD/CHF pair dropped to a 6-day low of 0.9158. At yesterday's trading close, the pair was quoted at 0.9176. The greenback is poised to challenge support around the 0.88 mark.

The USD/CAD pair touched more than a 2-month low of 1.3303. The greenback was trading at 1.3384 against the loonie at yesterday's close. Should the greenback falls further, it is likely to test support around the 1.31 region.

The greenback reversed direction against the aussie and fell to a 7-1/2-month low of 0.7142. The greenback was worth 0.7103 per aussie at Wednesday's New York session close. Further downtrend may take the greenback to a support around the 0.73 area.

The greenback slipped to a 2-day low of 0.6514 against the kiwi, from a high of 0.6467 hit at 8:30 am ET. At Wednesday's close, the pair was valued at 0.6477. Continuation of the greenback's downtrend may lead it to a support around the 0.68 region.