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Dollar falls on poor U.S. growth report, though losses limited

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Investing.com -

Investing.com - The dollar traded lower than most major currencies on Thursday on news the U.S. gross domestic product contracted more than expected in the first quarter, though losses were limited as rough winter weather made the economy look worse than it really was.

In U.S. trading on Thursday, EUR/USD was up 0.08% at 1.3603.

The Bureau of Economic Analysis revealed earlier that the U.S. gross domestic product contracted 1.0% in the first quarter, after a preliminary estimate showed growth of 0.1%.

Market expectations had been for a 0.5% contraction. It was the first decline in U.S. GDP since the first quarter of 2011, and the dollar softened on the news, reminding investors that even when the Federal Reserve winds down stimulus programs, rate hikes won't come for some time afterwards.

Still, the report did contain some positive data.

Consumer spending, which drives more than two-thirds of U.S. economic activity, increased by 3.1%, up from the preliminary estimate of 3.0%.

Sentiments that rough winter weather bruised the economy in the first three months of the year as opposed to a major drop in demand supported the greenback as well.

Elsewhere, the National Association of Realtors reported that its pending home sales index rose 0.4% in April, missing expectations for a 1% gain.

Separately, the Department of Labor said the number of individuals filing for unemployment assistance in the U.S. last week fell by 27,000 to 300,000, exceeding expectations for a decline of 9,000.

The dollar was down against the yen, with USD/JPY down 0.09% at 101.76 and down against the Swiss franc, with USD/CHF down 0.07% at 0.8978.

The greenback was down against the pound, with GBP/USD up 0.04% at 1.6718.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.36% at 1.0836, AUD/USD up 0.71% at 0.9300 and NZD/USD down 0.27% at 0.8471.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.08% at 80.54.

On Friday, the U.S. is to round up the week with a report on personal income and expenditure as well as revised data from the University of Michigan on consumer sentiment.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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