Forex - Dollar regains composure, looks past GDP data

Published 04/29/2012, 10:10 PM
Updated 04/29/2012, 10:11 PM
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Investing.com - The dollar strengthened against most major currencies on Monday as investors looked beyond last week's surprisingly tepid U.S. gross domestic product numbers and ahead with concern over growth figures due out in Europe.

The Commerce Department on Friday reported the U.S. economy expanded 2.2% in the first quarter, missing market hopes for 2.5% growth.

While the news sent the greenback falling Friday, profit takers brought the unit back up in Asian trading Monday.

The euro was down against the dollar, with EUR/USD down 0.12% and trading at 1.3238.

Sluggish GDP growth figures continued to pump up fears the Federal Reserve will consider stimulating the economy via quantitative easing, under which the Fed buys bonds held by banks, flooding the economy with stimulating liquidity that weakens the dollar as a side effect.

Fed Chairman Ben Bernanke has said he cannot rule such measures out.

However, market watchers turned their attention to Europe on Monday, eager to see how Spain's GDP figures will come out as well as German retail sales, data due out later during the day.

Spain recently announced its jobless rate hit 24.4%, an 18-year high, the National Statistics Institute reported, while the country recently saw its debt ratings downgraded by U.S. ratings agency Standard & Poor's.

The dollar fell against the yen despite a decision by the Bank of Japan to expand a bond-back program by JPY10 trillion to weaken the currency.

Markets felt the easing measure fell short of what the economy needed.

Japanese markets were closed on Monday.

The greenback, meanwhile, was down against the pound, with GBP/USD up 0.10% and trading at 1.6280.

The U.S. currency was flat against the yen, with USD/JPY trading at 80.27, and up against the Swiss franc, with USD/CHF up 0.13% and trading at 0.9076.

The dollar was up against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.04% at 0.9810, AUD/USD down 0.20% at 1.0451 and NZD/USD down 0.03% at 0.8218.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.06% at 78.83.

Later Monday, the U.S. is to publish official data on core personal consumption expenditures price inflation and on personal spending, followed by a report on business activity in Chicago.







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