The dollar fell against the euro and the pound on Thursday as optimism rose in financial markets and the latest GDP data of the United States was better than expected.
Global stock markets rose for a third straight session on Thursday, boosting risk appetite in foreign exchange trading. Investors hope that governments' efforts, including the interest rate cut from the U.S. Federal Reserve on Wednesday, could help stabilize financial markets and stimulate economic growth.
The U.S. Commerce Department reported that gross domestic product fell by 0.3 percent in the third quarter compared to the 2.8 percent growth that was seen in the second quarter. It was the worse quarterly economic contraction in seven years. The fall was smaller than a 0.5 percent drop analysts forecasted, eased investors' worries.
High-yielding currencies such as the euro and the pound rose sharply against the dollar in past sessions, but analysts were skeptical about the sustainability of the rally. Some expected strong resistance for the euro at 1.32 dollars.
The dollar will rise to parity with the euro in 2009 as the European Central Bank cuts interest rates and market volatility prompts U.S. investors to repatriate funds and hedge their currency risks, financial institution State Street Global Markets said.
The euro bought 1.2967 dollars in late New York trading compared with 1.2852 dollars it bought late Wednesday. The pound rose to 1.6444 dollars from 1.6314 dollars.
The dollar rose to 1.1376 Swiss francs from 1.1367 Swiss francs, and rose to 98.48 Japanese yen from 97.14 Japanese yen. It fell to1.2133 Canadian dollars from 1.2262 Canadian dollars.
Source:Xinhua
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