North-West Financial Broker
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29 Jan - Fundamental
The dollar rose against the yen Friday, but held steady against other currencies, as traders await a key report on U.S. economic growth.
What prices are doing: The dollar was flat against the euro at $1.3965 and was also unchanged versus the U.K. pound at $1.6135. But it rose 0.4% against the Japanese yen to ¥90.26.
What's moving the market: Trading was subdued ahead of the government's initial reading of fourth-quarter U.S. gross domestic product, which is due at 8:30 a.m. ET.
GDP, the broadest measure of economic activity, is expected to show an annual growth rate of 4.7% for the last three months of 2009, according to economists surveyed by Briefing.com. That compares with a 2.2% rate in the third quarter, which came after a full year of economic contraction.
The Chicago PMI, a regional manufacturing survey, is also on tap, as is the University of Michigan's survey on consumer sentiment.
The cautious tone came as stocks tumbled in Asia. The Nikkei in Japan fell more than 2% and China's Hang Seng closed down 1.1%.
In Europe, stocks were supported by rumors that European Union members could come to the aid of debt-stricken Greece.
Meanwhile, U.S. stock futures were pointing to early gains when markets open. Investors responded to strong quarterly results from Amazon (AMZ) and Microsoft (MSFT, Fortune 500), as well as Ben Bernanke's confirmation to chair the Federal Reserve for a second term.
What analysts are saying: «The U.S. dollar and Japanese yen rose against the spectrum of major currencies while stocks tumbled as risk aversion continued to dominate currency markets,» Ilya Spivak, a currency analyst at DailyFX, wrote in a note to clients.
«Traders are likely to overlook European event risk, looking ahead to fourth quarter U.S. GDP results,» he added.
