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FOREX-Dollar rises vs yen, cuts losses vs euro on U.S. GDP surprise

* U.S. GDP rises 2.6 pct, boosts dollar

* U.S. data does not alter path of Fed policy-analyst

* Graphic: World FX rates in 2019: http://tmsnrt.rs/2egbfVh (Adds analyst comment, updates prices)

By Gertrude Chavez-Dreyfuss

NEW YORK, Feb 28 (Reuters) - The dollar rose to a 10-weekhigh against the yen and pared losses versus the euro onThursday, after U.S. data showed growth in the world's largesteconomy was stronger than expected in the fourth quarter.

Prior to the data, the dollar index, a measure of thegreenback's value against six major currencies, had fallen to athree-week trough.

According to the Commerce Department, U.S. gross domesticproduct increased at a 2.6 percent annualized rate in the fourthquarter after expanding at a 3.4 percent pace in theJuly-September period. Economists had been expecting growth ofjust 2.3 percent.

The economy overall grew 2.9 percent in 2018, the bestperformance since 2015, and better than the 2.2 percent in 2017.

"For now, this points to upwards risks for the dollar, asmarket pricing for further rate hikes is very cautious at lessthan one interest rate hike in 2019," said Bart Hordijk, marketanalyst at Monex Europe in Amsterdam.

In afternoon trading, the dollar index was up slightly at 96.175 .DXY recovering from a three-week low. Traders saidsome of its weakness was caused by month-end selling after astrong month for risky assets.

Against the yen, the dollar rose 0.5 percent to 111.48 yenJPY= , turning positive after the U.S. GDP data, and hitting a10-week high of 111.49 yen.

Eric Viloria, FX strategist at Credit Agricole in New York,said the GDP report does not change the trajectory of FederalReserve policy.

"Our economists have been forecasting one more U.S.(interest rate) hike this year, so there's no real change tothat," he added.

The euro, meanwhile, was up 0.1 percent at $1.1376EUR= ,paring gains that took it to a three-week high.

Latest positioning data showed speculators have been rampingup negative bets on the euro since December to a near two-yearhigh on concerns European policymakers won't raise interestrates this year.

The safe-haven Swiss franc, meanwhile, rallied against thedollar, which fell 0.4 percent to 0.9973 francCHF= , afterweak Chinese factory data and after talks between U.S. PresidentDonald Trump and North Korean leader Kim Jong Un at their secondnuclear summit collapsed unexpectedly.

The franc tends to rally in times of geopolitical tension.

Trump said no deal was reached because Kim wanted allsanctions lifted in exchange for partial denuclearization.

"The disheartening and abrupt end to the meeting didn'tinspire confidence in the ongoing U.S.-China tradenegotiations," said Joe Manimbo, senior market analyst atWestern Union Business Solutions in Washington.

In China, meanwhile, factory activity reached a three-yearlow in February as export orders fell at the fastest pace sincethe global financial crisis, more evidence of an economy facingweak demand at home and abroad.

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Currency bid prices at 3:32 PM (2032 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session Euro/Dollar EUR= $1.1376$1.1369 +0.06% -0.80% +1.1420 +1.1359 Dollar/Yen JPY= 111.4700 110.9800 +0.44% +1.10% +111.4900 +110.6600 Euro/Yen EURJPY= 126.84 126.19 +0.52% +0.49% +126.9000 +125.9000 Dollar/Swiss CHF= 0.9978 1.0014 -0.36% +1.67% +1.0017 +0.9927 Sterling/Dollar GBP= 1.3263 1.3308 -0.34% +3.97% +1.3324 +1.3254 Dollar/Canadian CAD= 1.3147 1.3154 -0.05% -3.59% +1.3207 +1.3140 Australian/Doll AUD= 0.7097 0.7138 -0.57% +0.68% +0.7166 +0.7091 ar Euro/Swiss EURCHF= 1.1354 1.1385 -0.27% +0.89% +1.1388 +1.1330 Euro/Sterling EURGBP= 0.8578 0.8542 +0.42% -4.52% +0.8586 +0.8538 NZ NZD= 0.6809 0.6845 -0.53% +1.37% +0.6854 +0.6797 Dollar/Dollar Dollar/Norway NOK= 8.5507 8.5460 +0.05% -1.02% +8.5648 +8.5154 Euro/Norway EURNOK= 9.7308 9.7184 +0.13% -1.77% +9.7402 +9.7200 Dollar/Sweden SEK= 9.2304 9.2708 -0.33% +2.97% +9.2757 +9.1691 Euro/Sweden EURSEK= 10.5066 10.5410 -0.33% +2.36% +10.5580 +10.4660

gertrude.chavez@thomsonreuters.com gertrude.chavez.reuters.com@reuters.net


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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