Investing.com - The dollar gave back earlier gains against most
major currencies and dipped on Friday after better-than-expected
U.S. growth data enticed investors out of safe-haven dollar
positions and into higher-yielding currencies and stocks.
Investors also sold the dollar for profits after locking in gains
from the Federal Reserve's decision to trim its USD85 billion in
monthly bond purchases by USD10 billion.
In U.S. trading on Friday, EUR/USD was up 0.07% at 1.3655.
The dollar rallied after the Federal Reserve announced on Wednesday
that it was cutting its USD85 billion monthly bond-buying program
by USD10 billion in January now that the economy is gaining steam.
Fed bond purchases tend to weaken the dollar by driving down
long-term interest rates.
On Friday, profit taking kicked in and weakened the greenback,
while surprisingly strong U.S. economic growth rates sent investors
ditching the greenback for risk-on asset classes such as stocks
later in the session.
The Commerce Department reported earlier that the U.S. gross
domestic product expanded by 4.1% in the third quarter, well above
consensus forecasts for 3.6% growth.
Meanwhile in Europe, Standard & Poor's cut the European Union's
long-term credit ratings to 'AA+' from 'AAA' over concerns that
E.U.'s financial profile has deteriorated while cohesion among E.U.
members has lessened, though the euro shrugged off the news.
Also in Europe, the Gfk German consumer climate index rose to 7.6
in December from 7.4 in November. Analysts were expecting the index
to remain unchanged this month.
Also in Germany, the producer price index in Europe's largest
economy fell 0.1% in November, in line with expectations after a
0.2% decline the previous month.
Elsewhere, the greenback was up against the pound, with GBP/USD
down 0.26% at 1.6330.
Official data showed that the U.K. current-account deficit widened
to GBP20.7 billion in the third quarter from GBP6.2 billion in the
three months to June. Analysts were expecting the current account
deficit to widen to GBP13.9 billion in the last quarter.
A separate report showed that the U.K. gross domestic product
expanded by 0.8% in the third quarter, in line with previous
Official data also showed that public sector net borrowing in the
U.K. rose by GBP14.8 billion in November, exceeding expectations
for a GBP13.4 billion rise, after a downwardly revised GBP7.4
billion increase in October.
The dollar was down against the yen, with USD/JPY down 0.19% at
104.05, and up against the Swiss franc, with USD/CHF down 0.23% at
The dollar was down against its cousins in Canada, Australia and
New Zealand, with USD/CAD down 0.12% at 1.0651, AUD/USD up 0.60% at
0.8920 and NZD/USD trading up 0.03% at 0.8194.
In Canada, official data revealed that the country's consumer price
index came in flat in November compared to expectations for a 0.2%
fall. Core consumer price inflation, which excludes the eight most
volatile items, ticked down 0.1% last month, confounding
expectations for a 0.1% rise.
A separate report showed that retail sales in Canada slipped 0.1%
in October, disappointing expectations for a 0.3% rise. Core retail
sales, which exclude automobiles, increased by 0.4% in October,
compared to expectations for a flat reading.
The dollar index, which tracks the performance of the greenback
versus a basket of six other major currencies, was down 0.04% at
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