The Dollar strengthened yesterday afternoon when figures showed the US economy expanded at a revised 1.4% rate in the second quarter, surpassing even the most optimistic forecasts.
Analysts believe the US economy is in good shape and households are doing the heavy lifting for the economy, making up for tepid business investment and lackluster demand from overseas. On the heels of robust hiring and nascent wage gains, consumer spending is projected again to drive growth in the third quarter. The upward revision to GDP also reflected a smaller drag from inventories and higher exports.
Also released yesterday was the weekly unemployment benefits figure which showed the number of applications remained low, the latest sign that layoffs are scarce. Businesses are hiring steadily and holding tightly to their staffs. With the unemployment rate low at 4.9 percent, many employers say they can't find qualified workers for open positions. That makes them reluctant to cut jobs.
Janet Yellen spoke at a minority bankers’ conference at the Kansas City Fed via videoconference and discussed stock-buying as a tool for policy makers in the future as a way to boost the economy in a downturn.
09:30 - GBP - Current account is forecast to decrease to -30.5B