Forex headlines for August 29, 2013:

  • US second quarter GDP revised to 2.5% vs 2.2% expected
  • US weekly initial jobless claims +331k vs +332 exp
  • Lacker says Fed picking winners and losers by supporting mortgage market
  • Flow models point to US dollar strength to close out the month
  • German HICP 1.6% y/y vs 1.7% exp
  • Syria moving missiles to avoid US strikes – RTRS
  • UN Security council meeting on Syria
  • The latest leaks from Snowden
  • Gold down $10 to $1407
  • USD leads, CHF lags

The better GDP numbers led to a rally in the US dollar. Some of the optimism was cut but certain caveats in the data like inventory building but overall the news was positive. At the same time, White House rhetoric suggests a short, targeted attack on Syria rather than a long-term engagement.

USD/JPY offers at 98.50/55 capped the post-GDP move and then capped a later test as stocks rallied. The pair has drifted back to 98.22. Key trendline resistance is at 99.00.

EUR/USD was on the defensive until Europe went home. German employment and inflation numbers were both low with retail sales on the docket tomorrow. The pair slipped as low as 1.3217 but has rebounded to 1.3242. At one point, it was the worst day for the euro since May.

Oil has been wilting late in the day, now just below $108 after trading above $110 in US afternoon trading.