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Forex - Dollar inches down on Fed comments, data supports

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Investing.com - The dollar moved lower against most major currencies on Thursday after a key Federal Reserve official said stimulus programs will stay in place if the economy does not continue to improve.

Suring U.S. pending home sales supported the dollar, though many investors avoided it to wait for fresh steering currents.

Monetary stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery.

In U.S. trading on Thursday, EUR/USD was up 0.22% at 1.3040.

The National Association of Realtors said its pending home sales index rose by 6.7% in May, well above expectations for a 1% gain.

Pending home sales rose 12.5% on a year over year basis last month, also above expectations for an 8.3% increase.

Elsewhere in the U.S., jobless claims fell in line with expectations last week, government data revealed.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 9,000 to 346,000, in line with expectations for a drop of 10,000 to 345,000.

A separate report showed that U.S. personal spending was up 0.3% in May, in line with expectations.

The numbers supported the dollar somewhat though the currency traded lower on a downward revision to U.S. first quarter growth on Wednesday.

On Wednesday, the Commerce Department said it revised down first quarter growth to an annualized 1.8% from an initial estimate for 2.4% growth.

Elsewhere, Federal Reserve Bank of New York President William Dudley said earlier Thursday that the U.S. central bank will keep monetary stimulus programs in place if economic recovery falters.

Dudley's comments and weaker-than expected economic growth figures stoked expectations for the Federal Reserve to keep stimulus programs in place for the coming months, which pushed the dollar lower Thursday.

The greenback was up against the pound, with GBP/USD trading down 0.34% at 1.5263.

The pound came under pressure after revised data showed that the U.K. economy expanded at an annual rate of 0.3% in the first quarter of this year, down from a preliminary estimate of 0.6% growth. The quarterly growth rate remained unrevised at 0.3%.

The dollar was up against the yen, with USD/JPY up 0.59% at 98.29, and up against the Swiss franc, with USD/CHF trading up 0.15% at 0.9448.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 1.0477, AUD/USD up 0.01% at 0.9279 and NZD/USD trading down 0.04% at 0.7788.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.07% at 83.15.

On Friday, the U.S. will release a report on manufacturing activity in Chicago and 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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