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Thursday, August 27, 2009
LONDON — The euro dipped against the dollar Friday on profit-taking after a rally a day earlier in the wake of surprisingly positive eurozone economic data, dealers said.Approaching midday trade here, the European single currency dipped to 1.4283 dollars from 1.4287 dollars in New York late on Thursday.
Against the Japanese unit, the dollar fell to 95.17 yen from 95.36 yen late Thursday.
The dollar was lacklustre after data released Thursday showed US retail sales unexpectedly dipped 0.1 percent in July, highlighting ongoing consumer weakness in the world's largest economy.
New claims for jobless benefits in the United States meanwhile unexpectedly rose by 4,000 in the past week to 558,000.
The gloomy numbers were released just hours after Germany and France both announced surprise economic growth of 0.3 percent for April-June, emerging from the worst recession in decades.
"Markets had until recently anticipated that the US will be the first major economy to emerge from recession," said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong.
"The resulting improvement in growth and interest rate differentials was supposed to push the greenback up versus other majors," he said.
"But data released during the past 24 hours makes such scenario a bit less certain and has led to a decline in the dollar."
The positive eurozone data reinforced investor optimism that the worst of the global economic downturn is over.
Japanese data due out on Monday was expected to show that the world's second-largest economy also rebounded between April and June.
The Federal Reserve on Wednesday said that the US economy was stabilising and that it would gradually scale back its massive effort to pump liquidity into the creaking financial system.
Elsewhere on Friday, the safe-haven yen rose against the dollar and the euro as a drop in Chinese share prices reduced investors' appetite for risk, dealers said.
The Japanese currency, seen as a relatively safe bet during times of uncertainty, rose after Chinese shares slid on renewed concerns that Beijing will tighten its monetary policy, dealers said.
"Euro/yen selling pressure, which is coming from the Chinese stock weakness, is bringing the euro down against the dollar as well," Osao Iizuka, a senior dealer at Sumitomo Trust & Banking, told Dow Jones Newswires.
In London on Friday, the euro was changing hands at 1.4283 dollars against 1.4287 dollars late on Thursday, at 135.94 yen (136.25), 0.8627 pounds (0.8615) and 1.5290 Swiss francs (1.5285).
The dollar stood at 95.17 yen (95.36) and 1.0705 Swiss francs (1.0697).
The pound was at 1.6554 dollars (1.6583).
On the London Bullion Market, the price of gold increased to 956 dollars an ounce from 953.50 dollars an ounce late on Thursday.
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