Thursday, March 26, 2009

Dollar makes gains on GDP data

The dollar rose against most major counterparts Thursday, as investors took hope from revised U.S. gross-domestic-product data, which showed a less-dire contraction than many had feared.

In late-afternoon trading in New York, the euro was at $1.3517, down from $1.3597 late Wednesday. The dollar rose to 98.79 yen, up from 97.43 yen. The euro was at 133.55 yen, up from 132.47 yen. The dollar traded at 1.1280 Swiss francs, up from 1.1197 francs. The pound was at $1.4446, down from $1.4552 late Wednesday.

U.S. real gross domestic product plunged at a 6.3% annualized seasonally adjusted rate in the fourth quarter, the Commerce Department reported Thursday in its third estimate of quarterly growth. GDP hadn't fallen so much since the first quarter of 1982. It was the third-largest decline in GDP in 50 years.

However, the downward revision to a 6.3% drop was smaller than the 6.7% decline expected by economists surveyed by MarketWatch. A month ago, the government agency said the economy fell at a 6.2% annual rate.

"Despite the doom-and-gloom outlook by some economists and the pessimistic feel on Main Street, recent economic data hasn't been as weak as everyone expected," said Kathy Lien, director of currency research at GFT.

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