Mid-Day Report: Dollar Tumbles on GDP & Jobless Claims, But Supported by Chicago PMI

arket Overview | Written by ActionForex.com | Jul 31 08 13:52 GMT |

Dollar retreats further against most major currencies in early US session Q2 GDP missed expectation and grew at 1.9% annualized rate. GDP price index was rose much less than expected at 1.1%. Personal consumption grew 1.5% while PCE core was also below expecting, growing 2.1%. Jobless claims released today surged sharply to 448k, adding more pressure to the greenback. Though, better than expected Chicago PMI is providing some support to the greenback. Nevertheless, the retreat in dollar is somewhat expected from a technical point of view on overbought condition. With near term support still holding, the overall short term dollar bullish outlook doesn't change but will probably need a solid NFP number tomorrow to trigger another rally. Canadian dollar remains in tight range against the greenback after data showed the economy unexpectedly contracted by -0.1% mom in May. Aussie continued to be weighed down by disappointing retail sales released overnight and recovers relatively much weaker than other majors. Retail sales miss expectation and dropped -1.0% mom in Jun. Australia trade balance unexpectedly showed 411M surplus in Jun. Eurozone Jul HICP flash released earlier today showed inflation climbed to 16 years high of 4.1% yoy. Unemployment rate also climbed from 7.2% to 7.3% in Jun. Data from UK saw Gfk consumer confidence tumbled to record low of -39 in Jul. Nationwide house price dropped more than expected by -1.7% mom, -8.1% yoy in Jul. Swiss CPI dropped -0.4% mom, rose 3.1% yoy in Jul, above expectation of -0.5% mom, 3.0% yoy. Some volatility is seen in EUR/GBP but after all the cross is still staying in tight range. Weakness is more apparent in the Swissy as seen in strength in both EUR/CHF and GBP/CHF crosses.