By Saqib Iqbal Ahmed
NEW YORK (Reuters) - The greenback edged increased in opposition to the euro on Thursday after knowledge showed the U.S. economic system maintained a solid tempo of development in the fourth quarter, backing the case for the U.S. Federal Reserve to protect up its hawkish stance for longer.
Downhearted domestic product increased at a 2.9% annualised rate final quarter, the Commerce Department acknowledged in its advance fourth-quarter GDP development estimate. The economic system grew at a 3.2% tempo in the third quarter. Economists polled by Reuters had forecast GDP rising at a 2.6% rate.
A separate file from the Labor Department showed initial claims for bid unemployment advantages dropped 6,000 to a seasonally adjusted 186,000 for the week ended Jan. 21.
"A a bit blended checklist painted by the U.S. knowledge," acknowledged Stuart Cole, head macro economist at Equiti Capital in London.
The details reward an economic system that's persevering with to model resilience in the face of the rapid monetary tightening up to now delivered by the Fed, Cole acknowledged.
"Nonetheless a huge contributor to this development memoir became inventories, a facet that's nearly sure to weaken as we plow thru 2023," he acknowledged.
"I mediate it reinforces the expectation of the Fed intelligent to 25 foundation points moves now," Cole acknowledged.
The euro became 0.23% decrease at $1.08895, nonetheless now now not far from the nine-month high of $1.09295 touched on Monday.
In opposition to the yen, the greenback became up 0.54% at 130.275 yen.
Consideration now turns to subsequent week's central monetary institution conferences, in conjunction with the Federal Reserve and the European Central Bank.
Traders broadly build a matter to of the Fed to elongate charges by 25 foundation points (bps) subsequent Wednesday, a step down from a 50 bps lengthen in December. In the meantime, the ECB has all nonetheless dedicated to elevating its key rate by half of a share point subsequent week.
Sterling became about flat on the day in opposition to the U.S. greenback, on tempo to log a narrow invent for the week, its third straight weekly upward thrust, at the same time as traders remained pondering about the duty going thru the Bank of England in controlling inflation without opposed an economic system already in recession.
The Aussie touched a brand contemporary 7-month high of $0.71425 on rising expectations that extra Reserve Bank of Australia hobby rate hikes are due after knowledge showed Australian inflation surged to a 33-one year high final quarter.
The Canadian greenback rose to a two-month high in opposition to its U.S. counterpart on Thursday, a day after the Bank of Canada raised hobby charges as expected in a switch that can also stamp the tip of the central monetary institution's aggressive tightening campaign.
In the meantime, bitcoin became little modified on the day at $23,123, persevering with to tread water after having jumped by a pair of 3rd in charge since early January, following big losses spurred by the high-profile collapse of the FTX crypto replace.