Investing.com - The greenback firmed against most major currencies on Thursday after the U.S. reported its economy grew at a healthy pace in the fourth quarter of last year.
In U.S. trading on Thursday, EUR/USD was down 0.85% at 1.3547.
The dollar rallied after the Commerce Department said gross domestic product expanded 3.2% in the three months to December, in line with most forecasts, even outpacing some, following a 4.1% rise in the third quarter.
Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010, which markets applauded especially, while exports grew by 11.4%.
The data strengthened the dollar by cementing market expectations for the Federal Reserve to continue trimming its monthly bond-buying program, which weakens the greenback pushing down long-term interest rates.
On Wednesday, the Fed said it was cutting the program to USD65 billion from USD75 billion. The program launched in late 2012 at USD85 billion in monthly purchases of Treasury and mortgage debt.
Elsewhere on Thursday, the Labor Department said the number of individuals filing for unemployment assistance in the U.S. last week rose by 19,000 to 348,000 from the previous week’s revised total of 329,000.
Analysts were expecting the figure to remain relatively unchanged at 330,000, though investors shrugged off the data.
Separately, the National Association of Realtors said its pending home sales index dropped by a seasonally adjusted 8.7% last month, disappointing expectations for a 0.3% gain, which also failed to dampen spirits.
Rough winter weather has taken its toll on recent economic indicators, though general market attitudes persist that U.S. recovery remains on track.
Rising stock prices in the U.S., Europe and elsewhere also bolstered the dollar as fears emerging-market contagion may spread cooled somewhat.
Meanwhile in Europe, Germany's consumer price index slowed to 1.3% in January from 1.4% in December, missing expectations for an uptick to 1.5%.
German inflation fell 0.6% in January from a month earlier. Market expectations were for a decline of 0.4%.
Also on Thursday, data showed that the number of unemployed people in Germany fell by 28,000 in December, outstripping expectations for a decline of 5,000. The German unemployment rate was unchanged at 6.8%.
A separate report showed that Spain’s recovery picked up in the fourth quarter, with gross domestic product expanding by 0.3%, up from 0.1% in the three months to September.
The dollar was up against the yen, with USD/JPY up 0.48% at 102.76, and up against the Swiss franc, with USD/CHF up 1.02% at 0.9036.
The greenback was up against the pound, with GBP/USD down 0.54% at 1.6475.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.04% at 1.1173, AUD/USD up 0.52% at 0.8786 and NZD/USD down 0.77% at 0.8151.
The Reserve Bank of New Zealand left the cash rate unchanged at a record low of 2.5%, but said the country’s "economic expansion has considerable momentum" and added that a return of interest rates to more normal levels can be expected "soon."
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.73% at 81.21.
On Friday, the U.S. is to round up the week with a report on manufacturing activity in the Chicago region, revised data on consumer sentiment and a report on personal spending.