The US economy contracted by 1%, jobless claims fall to

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The US economy squeezed more than expected in Q1: 1%. However, the more recent data from the previous week showed drop of 300K. The first revision of US GDP was expected to show a contraction of 0.6% in Q1, down from the first release that showed a growth rate of 0.1%. There still is a second and final revision. Weekly jobless claims were expected to stand at 321K.

The US dollar was somewhat lower: EUR/USD traded at `.3620, USD/JPY just above 101.50 and GBP/USD at 1.6715. The dollar is initially weaker, but recovering quickly.

Update: after an initial fall, USD/JPY is recovering and trading near 101.70. EUR/USD (which drifted lower earlier) is back to the pre-release levels and so is GBP/USD. The Australian dollar is now backing off the 0.93 level it challenged after the positive capex figure.

There is a consensus that the first quarter was low due to bad weather and Q1 was better. The data shows that Q1 was even worse than previously thought.

Personal consumption remained strong and was even upgraded from 3% to 3.1%. Private investment was revised sharply to the downside: from -6.1% to -11.7%. Also imports and government consumption weighed.

As aforementioned, the present seems better than the past, and jobless claims dropped to 300K, close to the multi-year low. The 4 week moving average now stands at 311.5K.

Further reading: 3 ways central banks can move markets

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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