The US dollar was back in favor this week against the lowyielding currencies as the slight GDP miss was seen as broadly positive and initialjobless claims dropped somewhat unexpectedly, said an economic report.There are many indications showing that normalization of the US economy continuesin 2014, showed the report, released by the National Bank of Kuwait (NBK).In consequence, investors chose to renew pressure on the Euro as we head intoEurope's inflation report on March 31 and the ECB meeting scheduled on April 3.Investors also seem to be more inclined to buy the US Dollar this week as spreads inrates between the Euro and the US are shrinking, which bring investors to use theEuro as a funding currency of choice.In the commodity complex, gold continues to lose ground again as the situation in the US continues to normalize, whereas the geopolitical situation in Europe does notseem to be worrying investors, it said.The US February pending home sales data provided a mild disappointment falling 0.8percent m-m versus expectation of an improvement of 0.2 percent. Last few months
trend across all regions including the west were weak relative to September andNovember, again consistent with softer underlying existing home sales.After harsh winter weather, the combination of an improving job market, strongerconsumer demand, less drag from U.S. government policies and a brighter globaloutlook is boosting optimism in the US. Indeed although GDP data came at 2.6percent at an annualized pace in Q4 from 4.1 percent in Q3, personal consumptiongrowth accelerated to 3.3 percent annualized from 2.0 percent, it added.In Europe, investors started attempting to take profit on their Euro positions. InFrance, consumer confidence climbed in March to the highest level since July 2012.The data for consumer confidence rose to 88 from 85 last month, the NBK reportindicated.In the UK, gross domestic product rose 0.7 percent in the fourth quarter of 2013according to data released on Friday. From a year earlier, the economy expanded 2.7percent, the most in almost six years, and there was an annual 8.5 percent increase in business investment.In China, potential RRR (Reserve Requirement Ratio) cuts are rising in China as thegovernment seeks to manage growing defaults. However, the government said it will
not resort to fiscal policies to boost growth and will instead focus on the quality ofgrowth, the report concluded.