The Dollar Gains on GDP Report/Oil Pullback

A better-than-expected preliminary read on Q2 GDP, along with a big pullback in oil, has helped the dollar to gain against most major currencies with he dollar index advancing 7.4 basis points (0.1%) to 77.125. In recent trade, oil had declined 2.3% to $115.40 per barrel after the EIA said it would release additional barrels of crude from its supply if Gustav hits Gulf operations. Oil had been as high as $120 in overnight trading. The dollar was recently moving 0.17% ahead of the euro and 0.47% in front of the pound, but was 0.01% weaker against the yen even as stocks gained.

The stock market liked the GDP number, despite the fact that without the contribution from exports (3.1%) the economy expanded just 0.2%. The DOW and S&P were making strong advances on the day, with gains of 1.6% and 1.06% respectively as the NASDAQ traded 0.85% higher. A reduction by 10,000 in the number of new unemployment claims was also a boost despite the fact that the number of people continuing to claim benefits was the most since November 2003.

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