The U.S. economy’s annual pace of contraction in the second quarter of 2009 was better than expected and signaled that the economy’s deep recession may be subsiding according to the U.S. Commerce Department. The annualized GDP report released today showed that the U.S. Gross Domestic Product contracted by 1.0 percent in the April to June 2009 quarter from the second quarter level of 2008. Economists and forecasts were expecting the GDP decline to be approximately 1.5 percent for the quarter. The second quarter GDP is a significant improvement from the revised 6.4 percent contraction in the first quarter of 2009. The first quarter decline was revised lower from an original 5.5 percent and marked the largest contraction in almost thirty years while the second quarter decline marks the first time since records began in 1947 that GDP data has shrunk for four quarters in a row.
Contributing to the second quarter GDP fall was a decrease in consumer spending, exports and nonresidential fixed investments. Exports of goods and services decreased by 7.0 percent after falling by 29.9 percent in the first quarter. Imports fell by 15.1 percent following a 36.4 percent decline in the first quarter. Consumer spending, which makes up approximately two-thirds of U.S. economic activity, decreased in the second quarter by 1.2 percent after increasing in the first quarter by 0.6 percent.
US Dollar falls lower in Forex Trading today.
The U.S. dollar has fallen sharply lower today against the other major currencies in the spot forex market. The dollar has been weaker versus the euro, British pound, Australian dollar, Canadian dollar, Swiss franc, New Zealand dollar and Japanese yen.
The euro has advanced versus the dollar as the EUR/USD has increased to trading at 1.4243 at 12:59 pm after opening the day at 1.4128 at 00:00 GMT according to currency data from Oanda.
The British pound has risen today as the GBP/USD has advanced from its 1.6520 opening exchange rate to trading at 1.6697 usd per gbp.
The dollar has fallen lower versus the Japanese yen today and the pair is trading at 94.66 after opening at the day at the 95.35 exchange rate.
The dollar is falling slightly versus the Canadian loonie as the USD/CAD trades at the exchange rate of 1.0793 after opening the day at 1.0803.
The dollar has declined against the Swiss franc as the USD/CHF trades at 1.0695 after opening at 1.0847 today.
The Australian and New Zealand dollars have both advanced higher today against the USD. The AUD/USD has climbed from its 0.8286 opening rate to trading at 0.8322 later today. The NZD/USD has increased from its 0.6557 opening to trading at 0.6596 today.
GBP/USD Chart – The British Pound sharply rising today versus the US Dollar in forex trading and reached over the 1.6700 threshold.