By Deborah Levine and Kim Hjelmgaard, MarketWatch
NEW YORK (MarketWatch) — The dollar flipped back to negative territory in late-morning U.S. trading on Thursday, as U.S. stocks gained and signalled investors are focusing on the positive.
The euro had been higher through most of the Asian and European sessions, trying to recoup losses from the prior day as traders, analysts, and politicians reconsidered the impact of the European Central Bank’s lending program.
The euro EURUSD -0.04% turned up to $1.3061, from as low as $1.3015 and $1.3049 in late North American trade Wednesday.
The dollar index DXY -0.08% , a measure of the greenback’s performance against six major currencies, slipped to 79.911 from 79.999 late Wednesday.
The dollar initially edged up after data said U.S. unemployment claims unexpectedly fell in the latest week, adding to reports showing the U.S. economy is improving, in contrast to many regions in the world. The U.S. Labor Department said jobless claims fell to 364,000 in the latest week. See story on jobless claims.
A separate report showed third-quarter growth was revised down to 1.8%. Read more on U.S. GDP.
“Risk currencies fell in the wake of the surprisingly weak GDP with euro hitting a session low,” said strategists at GFT. “But the pair has stabilized as equity prices rebounded.”
The Standard & Poor's 500 Index SPX +0.52% recently gained 0.4%. Read more on stocks in Market Snapshot.
The European currency had lost ground Wednesday, after more European banks than expected asked to borrow from the ECB’s three-year long-term refinancing operation (LTRO), raising concerns about banks and how they’ll use the loans. Read about euro, ECB on Wednesday.
“Choppy conditions likely reflect market uncertainty about the efficacy of the LTRO,” currency strategists at Brown Brothers Harriman wrote in a note. “While liquidity helps the banking system, underlying solvency and debt issues have not been addressed by the ECB’s actions and so further euro-zone tensions should reappear soon.”
Analysts also noted the recirculation of rumors about a ratings downgrade of France.
Among other major currencies, the British pound GBPUSD -0.07% traded at $1.5677, little changed from $1.5679 Wednesday.
The Australian dollar AUDUSD +0.40% appreciated to $1.0130 from $1.008, also indicating more willingness to shift into riskier, higher-yielding assets.
The Japanese yen turned down slightly, with the dollar USDJPY +0.09% buying ÂĄ78.13, up from ÂĄ78.10 late in the prior session.
Deborah Levine is a MarketWatch reporter, based in New York.
Kim Hjelmgaard is a MarketWatch editor based in London. Michael Kitchen in Los Angeles contributed to this report.
