RTTNews - The greenback was stronger against other majors Thursday in New York and held its gains from yesterday that came after the Federal Reserve's interest rate decision. The buck continued to rise on the pound and was also slightly higher against the euro and yen.
Investors also mulled over a couple of key economic reports released Thursday morning. A Commerce Department report showed that gross domestic product fell at an annual rate of 5.5 percent in the first quarter compared to the 5.7 percent decrease that had been reported. The revision came as a surprise to economists, who had expected the drop in GDP to be unchanged at 5.7 percent.
A Labor Department report showed that initial jobless claims rose to 627,000 from the previous week's revised figure of 612,000. Economists had expected jobless claims to edge down to 600,000 from the 608,000 originally reported for the previous week.
As expected, the policymaking arm of the Federal Reserve kept its key interest rate steady yesterday, leaving it at a target range between 0 and 0.25 percent. The statement accompanying the rate decision was almost identical to the April statement in terms of economic outlook, signaling that economic activity, while moderating, will remain weak for some time.
The dollar was range-bound with the euro near 1.3930 throughout the session. The pair has been in a range since Wednesday afternoon when the bell rebounded away from its lowest level in nearly two weeks below 1.4000.
The buck rose to a two-week high against the sterling, reaching as high as 1.6231 before easing back. The greenback has slipped as low as 1.6592 yesterday, its lowest mark in nearly two weeks.
Bank of England Governor Mervyn King told lawmakers yesterday the British economic recovery would be a long, hard slog due to problems in the banking system.
The greenback touched a weekly high against the yen, extending a rally that began yesterday, before slipping slightly. The buck reached as high as 96.562 before slipping back to 96.181 in the early afternoon.
The Eurostat reported that industrial new orders plunged 35.5% year-on-year in April, after declining a revised 26.5% in March, and also faster than economists' expectations for a 32.8% fall. The latest decline is the biggest since the series began in 1995.
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