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US economy grows at 5pc, quickest in 11 year

US economy grows at 5pc, quickest in 11 year

LONDON: US growth, the strongest growth for the world’s largest economy in over a decade delivered pre-Christmas cheer in global markets on Wednesday as stocks maintained their strong run and the dollar hovered at an 8-1/2 year high.

Despite the approaching Christmas break, there was a late flurry of data that showed unemployment claims falling for a fourth straight week and a small uptick in mortgage applications.

The US economy grew at a 5.0 percent pace in the third quarter, the quickest in 11 years. The two year US Treasury (government bond) yield was hovering at levels not seen in almost four years.

The Dow Jones industrial rose 35.9 points, or 0.2 percent, to 18,060.07, the S&P 500 gained 2.42 points, or 0.12 percent, to 2,084.59, and the NASDAQ added 5.90 points, or 0.12 percent, to 4,771.33.

Most Asian markets had edged up overnight and Europe was looking to close the Christmas week up 1 percent despite a subdued day on Wednesday.

With economists pencilling in a slightly earlier date for the first post financial crisis rise in US interest rates, the dollar was taking a breather having reached its highest since 2006 against a basket of major currencies.

An FX Strategist at Societe Generale Alvin Tan said as is to be expected at this time of year, trading volumes have really plummeted, but pretty much what we see is the stronger dollar trend continuing.