The American economy, judging from the data presented on Wednesday, is turning upwards again, strengthening the growth potential. Clearly, this trend is correlated with the dynamics of the labor market, which in turn is at high pre-crisis levels.
According to the revised U.S. GDP data released on Wednesday, this macroeconomic indicator rose above the expected forecast, showing an increase of 3.0% against the expectations of an increase of 2.7% and 2.6% in July. The data is indeed strong, which is important. If the overall positive dynamics continue, it can be said that the American economy is resilient to political storms, despite the political struggle in Washington between the 45th president and his outspoken enemies in the parliament.
In addition to the figures for GDP, the values of the number of new jobs in the private sector from the ADP company also came out yesterday. At the same time, the results pleased market players who are betting on the growth of the US dollar. The indicator showed a significant increase of 237,000 new jobs in August compared to the forecast of 183,000 and the previous value in July, which was also revised from 178,000 to 201,000.
Once again, the published data showed that the labor market in the United States remains strong, and it is impossible to be ignored by the Federal Reserve. It can be assumed that if the inflation figures exhibit the return of the upward dynamics, the market expectation for a third increase in interest rates for this year will return again to 0.25%. In turn, this will support the U.S. dollar. Its growth will intensify if the increase in the national debt ceiling will take place by the end of September and the Fed will publish more detailed information on reducing the balance.
Today, we should pay attention to the figures for consumer inflation in the euro area, as well as the number of applications for unemployment benefits in the United States. The values for the GDP of Canada will be interesting for the second quarter, as well as the unfinished sales in the index of the real estate market in the U.S.
Forecast of the day:
The EURUSD pair is consolidating at the level of 1.1880. The decline will resume on the wave of strong employment data, which will be published tomorrow, Friday. If the number of new jobs above the forecast showed values above the forecast, this will support the dollar and the pair may fall to 1.1800 with the prospect of a further decline towards 1.1685.
The GBP/USD pair fell below the level of 1.2915 and its decline may continue to 1.2775. Pressure on the pair was because of the positive data from the U.S., as well as the fall of euro.