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The US economy grew at an annualized pace of 3.9% in Q2 2015 according to the final read, better than 3.7%  seen in the second release and the early expectations. In addition, the Core PCE Prices rose by 1.9%, stronger than 1.8% reported beforehand. The  deflator remains unchanged at 2.1%.

The US dollar is on the rise, but some of the gains were erased.

Also the components look better, with consumer spending up from 3.1% to 3.6%. Rises were also seen in  sales and in company profits. Exports and imports were little  changed. A  downward revision came in inventories, and this is good news on its own: depleted inventories require  replenishing afterwards, promising a good Q3.

Here are the immediate currency reactions.

  • EUR/USD traded around 1.1150 and afterwards at 1.1130.
  • USD/JPY flirted with 121 and rises to 121.20
  • GBP/USD was around 1.5166 and remains depressed.
  • USD/CAD  was just above 1.3320 and advances to 1.3345.
  • AUD/USD traded around 0.7015 and now slips below 0.70.
  • NZD/USD was  around 0.6340 and ticks down to 0.6320.

 

The third and final read for US Gross Domestic Product (GDP) in  the second quarter of 2015 was expected to stand at 3.7% (annualized) exactly like the second read. Also the Core PCE Prices indicator carried expectations for a confirmation at 1.8% and the GDP deflator at 2.1%.

Towards the release, the US dollar still enjoyed Yellen’s hawkish talk and maintained most of the high ground, especially against other major pairs, and less so against commodity currencies.

In our latest podcast we explain why the dollar defies the doves

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