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Dollar broadly higher as Fed news still supports

Published 12/20/2013, 05:13 AM
Updated 12/20/2013, 05:13 AM
Dollar broadly higher vs. rivals on Fed tapering

Dollar broadly higher vs. rivals on Fed tapering

Investing.com - The dollar was broadly higher against the other major currencies Friday, as investors eyed the release of U.S. economic growth data later in the day, while the Federal Reserve's decision to begin tapering its stimulus program still supported the greenback.

During European morning trade, EUR/USD edged down 0.13% to 1.3644.

Data earlier showed that the Gfk German consumer climate index rose to 7.6 in December, from a reading of 7.4 the previous month. Analysts had expected the index to remain unchanged this month.

A separate report showed that German producer price inflation fell 0.1% in November, in line woth expectations, after a 0.2% decline the previous month.

Meanwhile, the dollar remained supported after the Fed announced Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. Outgoing Fed Chairman Ben Bernanke said the economy was continuing to make progress.

The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.

The pound was lower against the dollar, with GBP/USD down 0.23% to 1.6336.

Official data showed that the U.K. current account deficit widened to GBP20.7 billion in the third quarter, from GBP6.2 billion in the three months to June. Analysts had expected the current account deficit to widen to GBP13.9 billion in the last quarter.

A separate report showed that the U.K. gross domestic product expanded by 0.8% in the third quarter, in line with previous estimates.

Official data also showed that public sector net borrowing in the U.K. rose by GBP14.8 billion in November, exceeding expectations for a GBP13.4 billion rise, after a downwardly revised GBP7.4 billion increase in October.

Elsewhere, the greenback was higher against the yen and the Swiss franc, with USD/JPY up 0.22% to 104.47 and with USD/CHF adding 0.08% to 0.8985.

Following a two-day meeting, the Bank of Japan kept its pledge to expand the monetary base by an annual JPY60 trillion to JPY70 trillion, in line with expectations.

The greenback was steady to higher against the Australian, New Zealand and Canadian dollars, with AUD/USD up 0.01% to 0.8866, NZD/USD sliding 0.31% to 0.8166 and USD/CAD up 0.04% to 1.0668.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.14% to 80.88.

Later in the day, the U.S. was to release revised data on third quarter GDP.


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