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US GDP data likely to boost Dollar further

This week may close on a high for the greenback as analysts forecast US GDP data for the third quarter will have expanded but at a slower pace amid global trade tensions.

US GDP likely to boost Dollar further

The Dollar has had a good week as fears of a global economic slowdown led to a flight to safe-haven currencies.

Business confidence is also falling in Germany amid persisting global trade tensions and protracted Brexit uncertainty. The German Ifo Business Climate Index fell from 103.7 in September to 102.8 in October as firms are less satisfied and optimistic about the current economic environment.

Meanwhile, Italian Deputy Prime Minister Luigi Di Maio has reiterated his party’s support for the single currency but refused to budge on the country’s 2019 fiscal plan. In an interview with Radio 24, he said, “Markets are not concerned about Italy respecting EU budget rules.”

The European Central Bank (ECB) has left interest rates unchanged at -0.4 per cent until September 2019. ECB Chair Mario Draghi also reiterated inflation and growth forecasts but said the Governing Council was not considering extending quantitative easing beyond December 2018.

This week will close with focus on the health of the US economy in light of the third-quarter Gross Domestic Product (GDP) data release at 13:30 (GMT). Analysts forecast GDP will have expanded by 3.3 per cent on an annualised basis. If the data come in above this figure, the Dollar will continue to gain strength.

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