Although economists expected US consumer spending to be little changed in March, Commerce Department data showed that household purchases increased by 0.2 per cent – down from February’s 0.7 per cent advance.
The US Dollar Exchange Rate was trading in the region of 97.7200 against the Japanese Yen as of 14:15 GMT
Unseasonably cool temperatures have been attributed to increased utilities spending, as price-adjusted spending on services increased by 0.6 per cent – the biggest gain since October 2001.
The data also showed that incomes rose by 0.2 per cent in March, considerably less than the 1.1 per cent increase recorded a month earlier.
As economist Millan Mulraine noted: ‘It’s a relatively decent showing for spending, but consumers won’t be able to sustain the current pace if income growth continues to disappoint. The weak inflation backdrop is likely to cause the Fed to at least keep purchasing [securities].’
On Friday US GDP for the first quarter of this year came in at 2.5 per cent, despite economists forecasting growth of 3 per cent.
Given the slower-than-anticipated pace of growth and recent inflation figures it appears increasingly likely that the Federal Reserve will announce its intention to continue with its current level of easing when it meets on Wednesday.
According to a survey compiled by Bloomberg, US economic growth is likely to weaken to 1.5 per cent in the second quarter of 2013 as the automatic spending cuts which began in March and the two percentage-point increase in the payroll tax which occurred at the beginning of this year take their toll.
After the figures were released the US Dollar declined against several of its riskier currency rivals and was trading in the region of 97.7100 against safe-haven counterpart the Japanese Yen.
Several pieces of key economic data for the US could trigger additional ‘Greenback’ fluctuations in the days ahead, including tomorrow’s consumer confidence figures and Wednesday’s unemployment change data.
Current US Dollar (USD) Exchange Rates
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The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6440 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7636 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.9676 <
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 97.7200 <
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0136 <
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.5523 >
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3101 >
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 1.0339 >
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9859 >
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 1.0342 >
(Correct as if 14:15 GMT)
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