The Dollar languished following early morning GDP data, with lackluster economic data providing little reason to push currencies in either direction. Despite a downgrade in final figures for Third Quarter domestic economic expansion, the Greenback remained almost squarely unchanged through the US session, with the EURUSD at $1.3170 as of 15:40 GMT. Later Philadelphia Fed Manufacturing numbers likewise produced little change, as a sharp Dollar drop was met with nearly instant buying interest.
Broadly mixed early economic data did little to change the fundamental outlook for the US economy, as markets had somewhat expected a downward revision to final numbers for Q3 GDP. Perhaps the bigger news of the morning was a slight gain in the GDP Price index, with numbers printing a slight revision from 1.8 to 1.9 percent through the same period. Heightened inflation expectations could explain the Greenbacks subsequent move higher against the low-yielding Japanese Yen, as any gain in price pressures bolsters the case for steady Fed interest rates through the medium term.
Regional economic data was not quite as benign, however, with the later Philadelphia Fed Manufacturing Survey showing the worst reading in over three years at -4.3. Manufacturers reported declining activity on the month of December, with an effort to shed excess inventory leaving production lower through the period. Despite a sharp gain in the total Shipments index to 19.0, falling demand dims outlook for the sector, as Unfilled Orders fared far worse at -20.7. Perhaps interestingly, however, some economists cited the reading as better than the headline figure would suggest. According to IFR Markets, the US Philly Fed survey would have printed an improvement of +4.6 points through December if it were weighted the same as the closely watched ISM Manufacturing Index.
US equities were not as fortunate as the steady dollar, as thin liquidity allowed market bears to concentrate on the negatives of economic releases. At time of writing, the S&P 500 index had dropped 3.69 points to 1419.84, while the Dow Jones Industrial Average shed 29.24 at 12434.63.
Bond traders were likewise left unimpressed by the slew of economic data, leaving yields slightly lower on a slow day of trade. The 10-year Treasury Note added 3/32 to 100-10, leaving yields a single basis point lower to 4.583 percent.
