Dollar Steady at Midrange After Choppy Trading Around Data

  • Rosy GDP revision punctured by income and spending misses
  • U.S. currency tracks swings in 10-year Treasury yield

The dollar found equilibrium near mid-range by early afternoon as a round of mixed economic data provided an excuse to further trim positions before the holiday break, briefly pushing the greenback to a fresh low as the 10-year Treasury yield retreated from session highs.

Personal income was unchanged in November vs economist estimates for a gain of 0.3%, while personal spending rose 0.2%, below projection for a 0.3% gain; the data offset a rosier economic picture presented by third-quarter gross domestic product -- the economy expanded at a 3.5 percent annualized rate, compared with a prior estimate of 3.2 percent, Commerce Department figures showed Thursday.

The dollar set fresh highs vs several G-10 peers after the GDP report, including the yen, only to see gains fizzle after the spending data.

Despite the price swings, FX flows were muted in the session and liquidity remained at low levels as traders sidestepped risky positions.

  • EUR/USD trading at 1.0442 vs 1.0499 fresh high in the session; EUR plowed through offers and stops above 1.0485 before being capped by offers ~1.0500
  • Earlier, EUR rose after the Bundesbank’s Weidmann cautioned the ECB not to hike rates too late
  • USD/JPY rose to a fresh high at 117.88 after the GDP data, only to relinquish all of those gains on the income and spending data
  • USD dropped to a fresh low at 117.27 before bids ahead of 117.20 cushioned the fall
  • Offers above 117.80 were filled in the early rally, with additional supply above 118.10 helping to cap the rally, a trader in London said
  • Japanese markets are closed tomorrow for the Emperor’s Birthday holiday
  • GBP/USD fell to a fresh six-week low at 1.2285 just ahead of the London close
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