Breaking News

Forex - Dollar falls on weak U.S. GDP data

ForexApr 27, 2012 02:53PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
Investing.com - Sluggish U.S. gross domestic product figures sent the dollar sliding against most major currencies on Friday on concerns the Federal Reserve will be more likely to simulate the economy.

The Commerce Department reported the U.S. economy expanded 2.2% in the first quarter, missing market hopes for 2.5% growth.

The euro was up against the dollar in U.S. trading Friday, with EUR/USD up 0.29% and trading at 1.3259.

Weaker-than-expected GDP growth figures primed fears the Federal Reserve will consider stimulating the economy via quantitative easing, under which the Fed buys bonds held by banks, flooding the economy with stimulating liquidity that weakens the dollar as a side effect.

Fed Chairman Ben Bernanke has said he cannot rule such measures out.

Sluggish growth figures offset the Thomson Reuters/University of Michigan's consumer sentiment's index of 76.4 for April, which beat expectations for a 75.7 reading.

Investors sold the dollar despite increasingly grim news out of Spain, which suffered a downgrade from U.S. ratings agency Standard & Poor's, the second such move this year.

Aside from cutting Spain’s long term debt rating to BBB-plus, the agency slapped a negative outlook rating on the country as well.

Furthermore, Spain's jobless rate hit 24.4%, an 18-year high, the National Statistics Institute reported.

However, Italy successfully sold bonds as did Spain albeit at high borrowing costs, which left investors selling dollars and snapping up assets like gold.

The dollar fell against the yen despite a decision by the Bank of Japan to expand a bond-back program by JPY10 trillion to weaken the currency.

Markets felt the easing measure fell short of what the economy needed, and investors stocked up on yen they sold in anticipation of the announcement.

The greenback, meanwhile, was down against the pound, with GBP/USD up 0.53% and trading at 1.6270.

The U.S. currency was down against the yen, with USD/JPY trading down 0.68% at 80.45, and down against the Swiss franc, with USD/CHF down 0.31% and trading at 0.9061.

The dollar was down against its counterparts in Canada, Australia and New Zealand, with USD/CAD down 0.37% at 0.9810, AUD/USD up 0.77% at 1.0469 and NZD/USD up 0.97% at 0.8226.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.30% at 78.77.

In the U.S. on Monday, the Chicago Purchasing Managers' Index will be released as will the Core Personal Consumption Spending Price Index.

Forex - Dollar falls on weak U.S. GDP data

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email