US dollar makes a comeback

LONDON – The dollar rose against the euro and yen on Friday, a day after slipping in the wake of data that showed the US economy grew at a slower pace in the first quarter than analysts had forecast.

The single European currency fell to US$1,1958 against US$1,1963 late on Thursday in New York. The dollar was being traded at Yen110,31 from Yen109,90 on Thursday.The price of gold firmed a day after slumping by almost 10 dollars, or over two percent, on the fixing ahead of the US growth figures.The US economy grew at an annual rate of 4,2 per cent in the first quarter of 2004, falling short of market expectations.Growth in US gross domestic product (GDP) picked up slightly from a 4,1-per cent growth rate in the last quarter of 2003, the Commerce Department said, missing analysts’ forecasts for a 5,0-per cent expansion.”The dollar has been undermined in the foreign exchange market by the weaker than expected real GDP report from the US,” Bank of Tokyo-Mitsubishi economist Derek Halpenny said.Thursday’s US data also showed inflation measures up in the first quarter, with the personal consumption expenditure price index rising 3,2 per cent from the fourth quarter’s 1,0 per cent and the core PCE index up 2,0 per cent against 1,2 per cent in the previous three months.Economists said the data was likely keep pressure on US Federal Reserve chairman Alan Greenspan to raise soon key short-term interest rates from a 46-year low of 1,00 per cent.- Nampa-AFPThe dollar was being traded at Yen110,31 from Yen109,90 on Thursday.The price of gold firmed a day after slumping by almost 10 dollars, or over two percent, on the fixing ahead of the US growth figures.The US economy grew at an annual rate of 4,2 per cent in the first quarter of 2004, falling short of market expectations.Growth in US gross domestic product (GDP) picked up slightly from a 4,1-per cent growth rate in the last quarter of 2003, the Commerce Department said, missing analysts’ forecasts for a 5,0-per cent expansion.”The dollar has been undermined in the foreign exchange market by the weaker than expected real GDP report from the US,” Bank of Tokyo-Mitsubishi economist Derek Halpenny said.Thursday’s US data also showed inflation measures up in the first quarter, with the personal consumption expenditure price index rising 3,2 per cent from the fourth quarter’s 1,0 per cent and the core PCE index up 2,0 per cent against 1,2 per cent in the previous three months.Economists said the data was likely keep pressure on US Federal Reserve chairman Alan Greenspan to raise soon key short-term interest rates from a 46-year low of 1,00 per cent.- Nampa-AFP