Week in FX Americas – US Economy Grows but Misses Expectations

The U.S. economy grew at an annualized rate of 2.5% in the first quarter of the year. Consumer spending during that time rose at a 3.2% rate but government spending cuts had a negative effect on growth. Analysts had estimated a 3% growth so the shortfall was disappointing for the USD. Due to negative employment indicators in Europe the EUR was not able to capitalize on USD weakness. On the other hand the USD was able to advance versus the JPY as deflation continues to grow and there are questions around the Bank of Japan’s policy being successful in a 2 year timeframe.

Jobless claims in the United States fell more than expected which boosted the hopes of a recovery before the GDP figures came out. Next Friday the Non-farm payrolls will be published and there will be a lot of expectation on the economic release as it could solidify the perception of a US recovery.

In Canada the deputy governor of the central bank Tiff Macklem stated that he would serve as the Bank of Canada’s governor if asked. After Mark Carney moves to the UK to take over presiding over the Bank of England there hasn’t been a strong candidate mentioned from outside the CB forward to succeed him.



* EUR German Consumer Price Index
* USD Federal Reserve FOMC Meeting
* EUR German Unemployment Change
* EUR Euro-Zone Unemployment Rate
* CAD Gross Domestic Product
* USD Consumer Confidence
* USD ISM Manufacturing
* USD Federal Open Market Committee Rate Decision
* EUR European Central Bank Rate Decision
* EUR Euro-Zone Producer Price Index (YoY)
* USD Change in Non-farm Payrolls
* USD Unemployment Rate

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza