Investing.com - The dollar pared gains against a basket of major currencies on Thursday after initially hitting fresh three-and-a-half week highs when official data showed that the U.S. posted stronger-than-expected third quarter growth, boosted by gains in exports and business investment.
The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 3.5% in the three months to September, beating forecast for 3%.
Another report showed that the number of Americans filing new claims for jobless benefits rose for a second week last week, but underlying trends still pointed to a recovery in the jobs market.
The Labor Department said initial jobless claims rose 3,000 to a seasonally adjusted 287,000.
The data came one day after the Federal Reserve ended its quantitative easing stimulus program, saying it was confident the U.S. economic recovery would continue.
The Fed also reassured markets that interest rates would remain on hold for a "considerable time".
EUR/USD was down 0.25% to 1.2600, after initially touching session lows of 1.2548 following the release of the data.
The single currency found some support after data earlier Thursday showed that Spain’s economy grew in the third quarter and another report showed an unexpected decline in the number of people unemployed in Germany this month.
Spain’s economy grew 0.5% in the three months September, and expanded 1.6% on a year-over-year basis, both in line with forecasts.
A separate report showed that the annual rate of inflation in Spain remained below zero this month, falling 0.1% after a 0.2% decline in September.
Germany was to release preliminary data on consumer prices later Thursday.
USD/JPY was up 0.06% to 108.95, off session highs of 109.36.
The dollar was slightly higher against the pound, with GBP/USD slipping to 1.5997. USD/CHF was up 0.25% to 0.9567.
NZD/USD eased up 0.15% to 0.7812 from almost one month lows of 0.7800.
The kiwi fell sharply in the previous session after the Reserve Bank of New Zealand left rates unchanged at 3.5% and said “a period of assessment remains appropriate before considering further policy adjustment." The bank had said previously that it expected some further monetary tightening would be necessary.
Elsewhere, AUD/USD added 0.14% to trade at 0.8807, while USD/CAD slid 0.17% to 1.1167.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.15% to 86.21, off three-and-a-half week peaks of 86.57.