FX round-up: Dollar rises against euro, pound leaps on GDP
Fri 26 Oct 2012
LONDON (SHARECAST) - The dollar rose against the euro on Thursday on the back of widespread speculation that Fitch Ratings could be about to downgrade its rating on the US economy, with the agency itself refusing to comment.
The ICE dollar index, which measures the greenback against a basket of six other major currencies, advanced from 79.932 on Wednesday evening to 80.067 last night.
Meanwhile, the pound was also performing well following the announcement that UK gross domestic product (GDP) rose at a 1.0 per cent clip in the three months to the end of September, according to the latest data out from the Office for National Statistics (ONS). This was the strongest reading since late 2007 and means that the economy exited from its double-dip recession.
The British currency traded at $1.6125 last night, up from $1.6042, having traded as high as $1.6143 following the announcement.
Economists at Barclays Research said: "ONS analysis suggests that the Olympic Games directly added just 0.2 percentage points to GDP growth, through ticket sales, in the third quarter."
They added that, "we had expected a broadly neutral effect from the Olympics, with the direct positive effects offset by displacement of other activity".
The euro traded hands at $1.2945, down from $1.2971 the previous evening.