If the currency markets were pinball …this would be full tilt!

After yesterday’s volatility, which turned many markets into steep slopes, today’s first priority was to assess damage control. The US Dollar woke up to a disappointing first revision of fourth quarter GDP. Initially coming across the wires at 3.5 percent in late January, the GDP revision offered a considerably lowered 2.2 percent annual pace. In terms of expectations, this was only slightly below the market’s official 2.3 percent consensus, though it does raise considerable concern for the future of the US economy. Comparing the advance and preliminary numbers in the breakdown, declines in investment, inventories and personal consumption were the most concerning. Gross private investment through the three months dropped 15.6 percent, following an initially reported 11 percent decline. This in turn was influenced by a cut in inventory growth from 35.3 percent in the first measurement to 17.3 percent. In addition to the GDP revisions, the Chicago Purchasing Managers Index – a measurement of factory activity in the Chicago area for February – was released, upsetting expectations with a drop to the report’s lowest level since 2002. Last but not least, new home sales completely undid the bullish sentiment underlying the pickup in existing purchases. All in all, it was a rough news day, with surprisingly little movement in the markets. Currently, the USD/JYP is trading at 118.39, and the EUR/USD is trading at 1.3233. David Hilgeman, XPRESSTRADE Analyst