Dollar falls after poor economic data
Agence France-Presse
NEW YORK—The euro rose against the dollar on Friday after another set of weak US economic indicators but was held back by persistent concerns over a possible Greek debt default, dealers said.
The euro climbed to $1.4317 by 2100 GMT from $1.4141 in New York late Thursday.
The dollar fell to 80.77 yen from 81.29 yen on Thursday.
The dollar began falling on Thursday after a report showed US jobless claims rose after two weeks of declines.
Washington also left unrevised its estimate of first-quarter economic growth at a tepid 1.8 percent. Most analysts had expected a rise to 2.0 percent.
“The fact that the US GDP data was not revised upwards, contrary to expectations, and that the initial jobless claims are rising notably again, was not good news for the dollar,” said analysts at Commerzbank.
“In the end that means the Fed will wait much longer before it begins to consider a normalisation of the currently ultra-expansionary monetary policy.”
The US Federal Reserve has kept rates at zero since December 2008 to boost economic recovery while the European Central Bank hiked its rates by a quarter point in April and is expected to do so again soon, proving a boost to the euro.
In Europe, Greece held emergency talks on tough new economic reforms under the gun of a new IMF debt warning and a looming risk of bankruptcy.
However, Prime Minister George Papandreou failed to secure a consensus on further austerity measures and 50 billion euros in privatisations, as the IMF seems likely to withhold a vital instalment of rescue money.
The IMF and EU have been looking for political consensus on pursuing the tough financial measures as Greece has so far had difficulty implementing steps needed to bring its finances back into balance.
That has pushed investors toward currencies seen as a safe-haven, such as the Swiss franc, which rose to fresh records against the dollar and the euro.
The dollar stood at 0.8488 Swiss francs, down from 0.8655 the day before.
“The greenback fell to a record low against the Swiss Franc which suggests that even though investors are bailing out of the low yielding currency and buying higher yielding ones, they are still very nervous,” said Kathy Lien of Global Forex Trading.
The pound was at $1.6511 (1.6393).
Sue Trinh at Royal Bank of Canada said trading was likely to remain choppy with volume thin as markets in London and New York will be closed for holidays on Monday.
Follow Us
Recent Stories:
Short URL: http://business.inquirer.net/?p=2690
Tags: Economic indicators , Economy and Business and Finance , US dollar
