The dollar relinquished its previous session’s strength against the majors, falling toward the 1.4850-level against the euro and the 1.6602-handle versus the British pound. The US equity bourses rebounded with the Dow Jones advancing by 1.65%, the S&P 500 advancing by 1.84% and the Nasdaq up by nearly 1.7% by the afternoon session. Crude oil also climbed back above the $80-per barrel mark. Optimism over the outlook for the US economy was reinforced by reports released earlier in the morning – prompting traders to jump back into riskier assets and sending the euro higher. The advanced reading of Q3 GDP sharply reversed the previous quarter’s decline of 0.7% and beat consensus estimates for an increase of 3.3%, instead surging by 3.5%. The advanced Q3 sales component of GDP advanced by 2.5%, compared with 0.7% from Q2 while the headline PCE index increased by 2.8% from 1.4% previously. Weekly jobless claims fell by less than expected, marginally lower to 530k from 531k a week earlier.The calendar for Friday consists of September personal income, personal consumption, PCE, core PCE, NAPM, Chicago PMI and the University of Michigan consumer sentiment survey. Following the disappointing Conference Board’s consumer confidence earlier this week, traders will focus on the University of Michigan consumer sentiment survey, expected to decline to 70.0 in October from 73.5 a month earlier. The expectations component is forecasted to decline to 69.0 from 73.5, while the current conditions index is seen slipping to 72.1 from 73.4.
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