The US dollar mostly weakened earlier during European trading, however as the GDP q/q data release is approaching (in about a half hour, at 12:30pm GMT) the US dollar is growing stronger with EUR/USD reaching a low of 1.2777, indicating that forex traders are back in the quest to safe-haven currencies (US dollar, yen).
“Better European growth news doesn’t alter the fact that the drivers of the euro’s recovery against the dollar are all pretty much played out,” wrote strategists at Societe Generale, cited by MarketWatch. “The sovereign credit crisis faded, European short-term rates rose, U.S. bond yields made a huge downward adjustment, and as we can see, European growth dramatically outperformed the U.S.”
Second-quarter GDP growth for the US economy, the world’s largest economy, is seen likely to be revised lower today in about 30 minutes after data on international trade for June released earlier this week showed an uptick in imports and a sharply wider deficit between exports and imports.
