Asian session: yen and dollar strengthened
The yen and dollar strengthened against most of their major counterparts as a decline in Asian stocks boosted demand for safer assets.
Japan’s currency also advanced on speculation exporters bought the currency before month-end judging its losses after yesterday’s downgrade of the nation’s credit rating were excessive.
The dollar rose from near a two-month low versus the euro before a U.S. report today forecast to show economic growth accelerated last quarter.
The pound declined after a U.K. report showed consumer confidence slid the most in almost two decades.
The U.S. economy expanded at a 3.5 percent annual pace in the three months ended Dec. 31, up from a 2.6 percent rate in the previous quarter, according to a survey before the Commerce Department releases the data. Consumer spending, which accounts for about 70 percent of the economy, increased at a 4 percent annual pace, the most since the last three months of 2006, according to the survey median.
EUR/USD: the pair decreased in around $1,3700.
GBP/USD: the pair decreased below a mark $1,5900.
USD/JPY: the pair decreased in around Y82,60.
US data starts at 1330GMT, when the advance estimate for fourth quarter GDP is for a 3.5% rate of growth, up sharply from the 2.6% gain in the previous quarter. The key factors are expected to be faster PCE growth, a rebound in residential fixed investment, and a narrower net export gap. These should be offset by falling inventories and government spending, and nearly flat non-residential fixed investment. The chain price index is forecast to rise 1.5% in the quarter, down from 2.1% in the previous quarter. At the same time, the Employment Cost Index is expected to rise 0.5% in the fourth quarter, up from 0.4% in the previous quarter. US data continues at 1455GMT when the Michigan
Sentiment index is expected to be revised up slightly to 73.0 in January from the 72.7 preliminary reading, but the index would remain below the 74.5 final reading for December.