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FOREX-Dollar falls to 6-week low vs yen after US GDP

Published 11/24/2009, 09:17 AM
Updated 11/24/2009, 09:21 AM

* Lower U.S. Q3 GDP lifts yen vs dollar

* Firmer Ifo helps euro reverse earlier losses (Recasts, updates prices, adds comment, U.S. data, changes byline, dateline; previous LONDON)

By Gertrude Chavez-Dreyfuss

NEW YORK, Nov 24 (Reuters) - The dollar fell to a six-week low against the yen on Tuesday after data showed the U.S. economy in the third quarter grew at a slower pace than previously thought.

That report slightly weighed on the market's appetite for risk, which boosted the yen and reduced appetite for higher-yielding currencies such as the Australian and New Zealand dollars.

According to the Commerce Department, the U.S. economy grew 2.8 percent, lower than the government's first estimate of a 3.5 percent growth rate a month ago. The figure was also slightly lower than market forecasts. For GDP data, click on [ID:nN23258482].

"This number is slightly negative for risk appetite because of the downgrade in the personal consumption number. But overall, this is an old number and it should have limited impact going forward," said Jacob Oubina, senior currency strategist at Forex.com in Bedminster, New Jersey.

Further adding to the negative risk sentiment was a weaker-than-expected report on U.S. home prices in September, which rose for a fifth straight month, but the rate of appreciation was slower. See [ID:nNYS007561].

The dollar fell to session lows against the yen at 88.36 , the lowest since early October, according to Reuters data. It was last at 88.40, down 0.6 percent on the day.

The euro, meanwhile, was slightly up at $1.4987 , reversing earlier losses as a firmer-than-expected German sentiment survey offset concerns about the country's banking sector. (Editing by Kenneth Barry) ((gertrude.chavez@thomsonreuters.com; +1 646 223 6322; Reuters Messaging: gertrude.chavez.reuters.com@reuters.net))

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