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Forex - Dollar slides as Cyprus banks reopen, GDP misses expectations

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Shutterstock photo - The U.S. dollar traded largely lower against most major currencies on Thursday after banks began to reopen in Cyprus amid relative calm after a near 2-week holiday, which fueled relief-buying of the euro and other higher-yielding currencies.

Slightly softer-than-expected gross domestic product figures out of the U.S. sent the dollar sliding as well.

In U.S. trading on Thursday, EUR/USD was up 0.37% at 1.2826.

Banks in Cyprus reopened with strict capital controls in place, though relief the island nation avoided a messy default and banking collapse allowed the euro to rise.

Cypriot financial institutions closed on March 16 amid fears of a bank run while bailout talks took place, though calmness held throughout the day as banks opened their doors.

U.S. growth rates dampened dollar demand as well.

The U.S. Commerce Department reported earlier that the country's gross domestic product expanded by 0.4% in the fourth quarter of last year, missing market forecasts for a 0.5% expansion, which watered down hopes the Federal Reserve may be closer to winding down monetary stimulus programs.

The growth rate was the slowest since the first quarter of 2011, though the figure did outpace initial estimates for growth of 0.1%.

Elsewhere, the U.S. Labor Department reported that the number of people filing for initial jobless claims rose by 16,000 to 357,000 last week, defying market calls for a drop of 1,000 to 340,000.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.41% at 1.5190.

The dollar was down against the yen, with USD/JPY trading down 0.38% at 94.11, and down against the Swiss franc, with USD/CHF trading down 0.57% at 0.9486.

The dollar was up against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.02% at 1.0164, AUD/USD down 0.29% at 1.0413 and NZD/USD trading down 0.06% at 0.8364.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.34% at 83.12. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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.

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