Forexpros – The U.S. dollar was broadly higher against its major counterparts on Thursday, after weak U.S. economic reports and as concerns over Spain’s ailing banking sector and soaring borrowing costs continued to dominate market sentiment.
During U.S. morning trade, the dollar was hovering close to an almost two-year high against the euro, with EUR/USD edging down 0.04%, to hit 1.2362.
Investor sentiment was hit after official data showed that the U.S. economy grew at a slower rate than initially estimated during the first three months of 2012, with first quarter gross domestic product expanding by 1.9%, in line with expectations, down from an initial estimate of 2.2%.
Meanwhile, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose by 10,000 to a seasonally adjusted 383,000, defying expectations for a decline of 3,000 to 370,000.
A separate report showed that the U.S. private sector added 133,000 jobs in May, missing expectations for an increase of 148,000.
In addition, data showed that manufacturing activity in the Chicago area slowed significantly more-than-expected in May, falling to the lowest level since September 2009.
Market sentiment remained somewhat supported by expectations that Ireland would pass a vote for the European Union’s fiscal treaty in a referendum on Thursday.
Elsewhere, the yield on Spanish 10-year bonds eased back to 6.51%, after climbing to a euro-era high of 6.7% on Wednesday as the lack of a convincing plan to recapitalize stricken lender Bankia fuelled fears that Madrid will be forced to seek an international bailout.
The greenback rose to a four-month high against the pound, with GBP/USD shedding 0.57% to hit 1.5390.
Elsewhere, the greenback extended losses against the traditional safe haven yen, with USD/JPY tumbling 0.67% to hit 78.54. The greenback erased losses against the Swiss franc, with USD/CHF easing up 0.06% to hit 0.9716.
The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.39% to hit 1.0341, AUD/USD losing 0.10% to hit 0.9695 and NZD/USD falling 0.29% to hit 0.7509.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.05%, to trade at 83.20.
Also Thursday, preliminary data showed that consumer price inflation in the euro zone eased to 2.4% in May, which could allow the European Central Bank leeway to cut rates in the coming months.
Forexpros
