After remaining relatively quiet during the Asian and European sessions, as well as the early hours of the New York session, the U.S. dollar surged higher on Friday. This uptick was driven by speculation that the Federal Reserve will take a more cautious approach to interest rate cuts and expectations surrounding former President Donald Trump’s potential return to power. Additionally, rising Treasury yields played a role in bolstering the dollar’s value.
In today’s economic updates, the Commerce Department reported a 0.8% decline in durable goods orders for September, which aligns with a revised decrease from August. Economists had predicted a 0.5% decrease in durable goods orders, contrasting with the unchanged figure that was initially reported for the prior month.
Revised data from the University of Michigan indicated an unexpected improvement in U.S. consumer sentiment for October. The consumer sentiment index was adjusted upward to 70.5 from an initial estimate of 68.9. Economists had forecasted a slight revision to 69.0.
On Friday, the Atlanta Fed revised down its U.S. growth forecast for the third quarter, citing recent official data along with figures from the housing market. The GDPNow model estimate for real GDP growth was decreased from 3.4% to 3.3% from the projection made on October 18.
The Federal Reserve Bank of New York also lowered its nowcast for U.S. GDP growth for the third and fourth quarters, attributing the adjustment to negative surprises in recent economic indicators. The New York Fed’s nowcast for third quarter growth was revised down to 2.9% from an earlier estimate of 3%, marking a second revision in just this month.
The dollar index experienced an increase, reaching 104.34 and climbing nearly 0.3%, after having traded near the flat line until just before noon.
In currency exchanges, the dollar appreciated against the Euro, moving to 1.0797 from 1.0828. Against the Pound Sterling, it rose to 1.2959 from 1.2977.
The dollar also strengthened against the Japanese yen, trading at 152.29 yen per dollar, a rise from 151.84 yen the previous evening. It improved against the Australian dollar as well, climbing to 0.6603, an increase of approximately 0.6% from 0.6640.
In dealings with the Swiss franc, the dollar gained slightly to CHF 0.8666, and against the Canadian dollar (Loonie), it advanced to C$ 1.3896 from C$ 1.3856, despite a significant increase in oil prices.
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