US Dollar Mixed As Economy Grew 2.1% in Q4, Coronavirus Threatens Q1

The US dollar is mixed on Thursday as the economy grew at a modest clip in the fourth quarter and traders are fleeing to safe-haven assets amid market turmoil. But investors are concerned that the coronavirus could significantly impact first-quarter gross domestic product (GDP), and do a lot more damage to the world’s largest economy.

According to the Bureau of Economic Analysis (BEA), the US economy rose 2.1% during the October-to-December period, matching forecasts among analysts and the federal government.
The main factor in subdued growth has been a weak business investment. In the last quarter, fixed business investment declined 2.3%, down from the initial reading of a 1.5% drop. Overall, companies spent less on capital equipment, particularly businesses in the oil and gas sector. Domestic manufacturers also curtailed output toward the end of the year due to lower demand amid the US-China trade dispute and lower global demand.
Consumer spending was also revised downward to 1.7%, down from 3.2% in the previous quarter. Exports climbed at an adjusted pace of %, while imports were relatively unchanged at 8.7%
In other data, durable goods orders dipped 0.2% last month, down from the 2.9% jump in December. The figure was higher than the median estimate of a 1.5% slide. Demand for transportation equipment and defense aircraft and parts slumped 2.2% and 19.6%, respectively. There was a higher demand for primary metals (2.2), machinery (2.1%), fabricated metal products (1.2%), and computers (0.3%).
The second estimate for the personal consumption expenditures (PCE) price index advanced 1.3% in the fourth quarter.
Initial jobless claims edged up 219,000 in the week ending February 22, up from the 211,000 boost in the previous week. Continuing jobless claims for the week ending February 15 clocked in at 1.72 million, down from 1.733 million in the previous week.
Global financial markets have taken a beating this week as the coronavirus continues to spread. With the latest report that suggests Covid-19 is spreading locally throughout the US, investors are searching for safe-haven assets and hitting the sell button on virtually everything. Many companies are warning that their quarterly figures will take a hit during the next earning season. President Donald Trump held a conference on Wednesday evening and confirmed that he has named Vice President Mike Pence as head of the coronavirus fight, which failed to calm investors and contain the market crash.
The US Dollar Index plunged 0.45% to 98.55, from an opening of 99.02, at 13:08 GMT on Thursday.
The USD/CAD currency pair surged 0.23% to 1.3365, from an opening of 1.3333. The EUR/USD soared 0.86% to 1.0976, from an opening of 1.0880.

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Original from: www.earnforex.com