FOREX-Markets quiet, dollar steady ahead of GDP data - Reuters

NEW YORK (Reuters) - The dollar was roughly flat on Thursday morning awaiting gross domestic product data on Friday, little moved by a report showing that factory activity in the mid-Atlantic region has nearly stalled this month.

FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. REUTERS/Lee Jae-Won

The dollar has been bolstered by strong economic data reported earlier this week that has decreased expectations the Federal Reserve will continue its interest rate-cutting cycle in 2020. That data, and anticipation of GDP, allowed the market to brush off Thursday’s report that the Philadelphia Fed’s business conditions index fell to 0.3 in December from 10.4 in November.

The dollar index .DXY was up 0.05% to 97.445 as traders held off from making major moves before the Bureau of Economic Analysis on Friday reports the final estimate of third-quarter GDP. Against the euro EUR=, the dollar was up 0.01% to $1.111.

“It’s very sleepy,” said Juan Perez, senior foreign exchange trader and strategist at Tempus Inc.

“Markets are quiet in anticipation of what may come tomorrow when it comes to gross domestic product.”

The dollar was also little moved by the impeachment in the House of Representatives of U.S. President Donald Trump on charges of abuse of power and obstruction of Congress.

The impeachment news did not affect risk appetite - the safe-haven Japanese yen was little changed against the dollar JPY=, 0.19% stronger to 109.3 yen, because the Republican-controlled Senate is widely expected to acquit Trump, leaving him in office.

Elsewhere, the Bank of England kept interest rates steady on Thursday, saying it was too soon to gauge how much Prime Minister Boris Johnson's election victory would lift the Brexit uncertainty that has hung over the economy. The pound was 0.48% weaker against the dollar at $1.301 GBP=, extending its precipitous drop this week after Johnson rekindled the possibility of a British exit from the European Union without a trade agreement.

The pound has fallen 3.74% since Johnson’s electoral victory on Dec. 13.

The Bank of England “didn’t seem too dovish but none too positive either. So, they’re in the same mode as the Fed where they’re just watching carefully to see how things politically are going to work out - if Brexit is going to happen,” said Perez.

BoE governor Mark Carney’s departure in the coming few weeks may weigh on sterling. The handover is “going to create more fog when it comes to come to central bank action,” said Perez, and it is unclear if Carney’s replacement will “continue mimicking the Fed or if they’re going to work closer with Boris Johnson.”

Reporting by Kate Duguid and Elizabeth Howcroft; Editing by Steve Orlofsky

Our Standards:The Thomson Reuters Trust Principles.

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