After a wave of top economic event risk, the US dollar has come through this past week with a more promising outlook for growth as well as diminished potential for a Fed rate hike this year. After the policy board announced its intentions to hold the benchmark lending rate at 2.00 percent and offered rhetoric that was more or less in line with the group’s middle-of-the-road commentary from previous months’ statements, the probability that the central bank would raise rates by the end of the year dropped from 71.6 percent to 59.9 percent.
[I]Be sure to join DailyFX Analysts in discussing the Watch What the Fed Watches latest report in the [/I][I]DailyFX Forex Forum[/I]
[I]
[/I]
[B] Improving outlook[/B] means the Federal Reserve could use this indicator to
support a rate hike. The opposite stands for a deteriorating outlook.
[B]CREDIT MARKET: HOW IS IT DOING?[/B]
[B]A DEEPER LOOK INTO THE CHANGES THIS WEEK:[/B]
[B]FINANCIAL MARKETS: HOW ARE THEY DOING?[/B]
[B]A DEEPER LOOK INTO THE CHANGES THIS WEEK:[/B]
[B]U.S. CONSUMER: HOW ARE THEY DOING?[/B]
<strong style="">
[B]A DEEPER LOOK INTO THE CHANGES THIS WEEK:[/B]
The outlook for economic activity is likely more mixed than recent activity in the markets would suggest. While second quarter GDP rose to a 1.9 percent annualized clip, there were notable revisions to the two previous readings (the fourth quarter number actually reflected the first contraction in growth since 2001). Such revisions remind us that this is just an initial number and it could change dramatically a couple months down the line. What’s more, the economy’s largest sectors are clearly not in the condition to support a rebound in growth. Employment and wages are tumbling (pinching consumer spending), while both manufacturing and service activity is stagnating.