US GDP Update And Syria Conflict In Focus

Growing tension about a possible US military action against Syria sparked safe-haven flows, benefiting the US Dollar that recovered most of its Tuesday’s losses against other major currencies. However, recent downbeat US economic indicators, including Wednesday’s Pending Home Sales data, eased worries over the Fed tapering its monetary stimulus in September, thus, capping any major strength for the US Dollar.

According to a report released on Wednesday by the National Association of Realtors, US pending home sales index, a forward-looking indicator, fell 1.3% in July to 109.5 from 110.9 in June, marking a second month of declines.

In addition to the Syria conflict, investors will also focus on the economic data from the US, scheduled for release later on Thursday. Today’s prime focus will be on the Preliminary estimate of US GDP for the second quarter of 2013. The US Commerce Department is scheduled to release its second estimate of US GDP for the April-June quarter later on Thursday. The Advance estimated showed that the US economy grew at an annualized rate of 1.7% in second quarter of 2013. However, on the back of better-than-expected trade data, the preliminary estimate is expected to positively surprise the market by showing that the economy grew at an annualized rate of 2.3% in the second quarter of 2013, compared to 1.7% growth in the previous estimate.

Further the unemployment claims data, also scheduled for release on Thursday, is expected to show that the number of individuals who filed for unemployment benefit for the first time during the past week fell slightly to 330,000 from 336,000 in the prior week.

• With markets paying close attention on developments over military action against Syria, second quarter US GDP estimate could possibly lead to some volatile moves in the currency market later on Thursday.
• Further, stronger GDP reading would confirm sustained economic recovery in the US and fuel expectations that the US Fed is likely to scale back the pace of its quantitative easing sooner rather than later, thus supporting strength for the US Dollar.

Original Article: Admiral Markets and hyper link Admiral Markets with http://www.admiralmarkets.com/