Dollar fades further from 14-year high; euro rises
Reuters
Published Dec 22, 2016 11:07AM ET
Dollar fades further from 14-year high; euro rises
By Richard Leong
NEW YORK (Reuters) - The dollar declined against a basket of currencies on Thursday, pulling further away from the 14-year high it set earlier this week as traders booked profits and brushed off mostly upbeat U.S. economic data.
The government said new orders for U.S. capital goods rose more than forecast in November and that the economy grew faster in the third quarter than it had estimated. Jobless claims, however, rose to their highest since June.
"We do have some profit-taking," said Stephen Casey, senior currency trader at Cambridge Global Payments in New York. "Trading is pretty thin."
On light trading ahead of Christmas, the dollar index (DXY), which measures the greenback against a group of six major currencies, was down 0.3 percent at 102.74 after reaching 103.65 on Tuesday, its highest since December 2002.
The dollar posted a series of multiyear highs after the U.S. Federal Reserve's hint last week that it might raise interest rates up to three times in 2017, which was one more than what some traders had expected.
The dollar rally that started six weeks ago has been underpinned by bets that U.S. President-elect Donald Trump and a Republican-controlled Congress would slash taxes and boost federal spending, resulting in higher growth and inflation.
As they awaited details on economic policies from the Trump administration, traders and analysts cautioned that the dollar, which has risen 5 percent on an index basis since Nov. 8, was vulnerable to a further pullback.
Still most of them have not changed their longer-term positive view of the U.S. currency.
"The trend is definitely for a stronger dollar," Casey said. "Any dip in the dollar will a buying opportunity."
While the dollar retreated for the second straight day, the euro gained in the aftermath of plans to rescue Monte dei Paschi di Siena, Italy's second-biggest bank.
The single currency
The euro was up 0.4 percent at 123.03 yen (EURJPY=).
The dollar was down 0.1 percent at 117.40 yen
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Written By: Reuters
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