“Better than we’d hoped, but still nothing to write home about,” is how you might sum up growth figures from the United States this afternoon. The world’s largest economy expanded 1.5% on an annual basis between April and June: more than the 1.2% some economists forecast, but less than 2.0% growth in Q1.
Still, it was enough to maintain the upbeat mood on the foreign exchange market: the dollar is half a cent down against the euro and pound this afternoon, in addition to the two cents it lost yesterday on Mario Draghi’s comments about saving the euro.
Will the US continue to slow down? That looks all too possible. Without a clear solution to the Eurozone debt crisis, in addition to the upcoming fiscal cliff, businesses and consumers ill remain cautious. Indeed, Dan Greenhaus, chief global strategist at BTIG, notes, “The current recovery has been utterly anaemic in relation to the average recovery in the post-war era.”
That leaves scope for the dollar to gain back ground, as risk appetite fades.
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