US Dollar Index dips under 83, remains strong against major currencies

The ICE US dollar Index opens Friday’s trading session at mid 82 levels after dipping lower however the dollar remains strong againt most major currencies in the run up to today’s US GDP (gross domestic product) report for the first quarter of 2013.

Latest US Dollar Index Rates

The ICE US Dollar Index, which tracks the US dollar against a basket of six major world currencies was trading at 82.760, 09:56 GMT this morning. The index rose to 83.106 in trading on Wednesday, its highest level since early April 2013.

US GDP Data For Q1 2013

Focus today will turn to the first quarter US GDP forecasts, which topped a 4 percent rate, but have been slashed to 3 percent after a raft of weak March data. The figures, due at 1230 GMT, could determine the market’s near term direction.

Economists surveyed by MarketWatch expect, on average, annualised growth in the US of 3.2 percent, up from 0.4 percent in the fourth quarter of 2012.

“We would be cautious” ahead of the report, “as the recent string of soft data highlight downside risks to this view,” Forex.com senior currency strategist Eric Viloria told clients late Thursday. “A softer-than-expected reading may weigh on the buck and increase expectations for prolonged [quantitative easing] by the Fed.”

“If we do come in near consensus, it will be a false positive reading for the economy,” said Robert Dye, chief economist at Comerica in Dallas. “It is still in that weak-to-moderate growth range of around 2 percent and is still struggling to maintain forward momentum.”

Given signs the US economy has weakened in recent weeks, the GDP data will probably not get much play in US financial markets. “The reality is the deceleration in the data that we have seen in the last weeks is going to be at the forefront, especially when you look at the Fed meeting next week,” said Jacob Oubina, a senior US economist at RBC Capital Markets in New York.

The Commerce Department will release the first quarter GDP report on Friday at 08:30 EST / 13:30 GMT.

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US Dollar Index dips under 83, remains strong against major currencies