US dollar advances after GDP declines; other reports point to still solid economy
The U.S. dollar firmed against major currencies on a data-packed Wednesday after a report showed the world's largest economy shrank in the first quarter, worse than market expectations, but better than the dire predictions touted by some of the biggest U.S. banks.
Gross domestic product (GDP) fell 0.3% in the quarter, a Commerce Department report showed in its first estimate, undermined by a surge in imports trying to front-load purchases ahead of the Trump administration's implementation of tariffs on most goods. Data showed that pre-tariff imports surged 41.3% in the first three months of the year.
Following the data, the dollar climbed versus the yen to trade 0.3% higher at 142.77 yen , while the euro slid 0.4% to $1.1343 .
The greenback was on pace for its biggest monthly decline against the yen since July 2024. Europe's shared currency, on the other hand, was on track to post its largest monthly gain since November 2022.
Sterling fell 0.5% to $1.3340 . For the month of April, the British pound rose 3.3%, its heftiest rise against the dollar since November 2023.
A separate report showing a rise in U.S. consumer spending and income as well as slowdown in annual inflation also boosted the dollar. Data showed U.S. personal income increased 0.5% in March and spending climbed 0.7%, which were both above economists' forecasts in a Reuters poll.
Earlier in the session, the ADP National Employment Report showed that U.S. private payrolls growth slowed more than expected in April. Private payrolls increased by only 62,000 jobs this month after a downwardly revised 147,000 gain in March. Economists polled by Reuters had forecast private employment would advance by 115,000.
The dollar pared gains versus the yen after the ADP data.
Source: Reuters
