BLBG: Dollar falls more on weak data, China report
Beijing expected to be buying European bailout debt, report says
By Deborah Levine and Lisa Twaronite, MarketWatch
NEW YORK (MarketWatch) — The euro gained against the dollar Thursday after a report that China and other Asian investors are interested in buying Portuguese bailout bonds.
The greenback dropped against the Japanese yen and the Swiss franc after weaker-than expected U.S. data as investors sought out those safer-haven currencies.
The euro EURUSD +0.3124% rose to $1.4188 from $1.4098 in late North American trading Wednesday. See real-time currency quotes and tools.
The dollar index DXY -0.37% , which measures the U.S. unit against a basket of six major currencies, fell to 75.425 from 75.847 late Wednesday.
Against the yen, the dollar USDYEN -0.90% bought ¥81.30, down from ¥82.00 late Wednesday.
The dollar USDSWF -0.6534% fell 0.8% against the Swiss franc.
Meanwhile, the British pound GBPUSD +0.4363% rose to $1.6354 from $1.6287.
The dollar fell against the yen and the franc after the Labor Department said first-time U.S. jobless claims unexpectedly rose in the latest week.
Separately, the Commerce Department report said the U.S. economy grew 1.8% in the first quarter, also disappointing analysts’ expectations.
The data served to assure traders that the Federal Reserve will continue to keep monetary policy loose.
”If anything, they have to tread carefully because the momentum in the U.S. recovery has moderated significantly,” said Kathy Lien, director of currency research for GFT.
The swift move in the dollar-yen pair “shows how seriously investors have taken this morning’s U.S. data,” she added
The more moderate euro-dollar move after the U.S. data indicated the greenback isn’t seen as the beneficiary of a “risk-off” scenario, when investors move to safer assets, said Alan Ruskin, global head of G-10 FX strategy at Deutsche Bank.
The yen and the franc have also been popular currencies to fund carry trades, in which a traders borrows against a low-yielding currency, generally weakening it more, to buy higher-yielding assets.
