JU: Dollar slips against euro, pound on economic data
NEW YORK — The dollar slipped against the euro and the pound Wednesday on news the U.S. economy likely grew in the third quarter but should slow at the end of the year amid employment and credit worries.
Meanwhile, a Midwestern manufacturing report came in weaker than expected. Data on weekly U.S. jobless claims, personal income and construction outlays are due for release on Thursday and will be closely watched.
The 16-nation euro edged up to $1.4646 in late New York trading from $1.4568 late Tuesday, while the British pound rose to $1.6008 from $1.5941. The dollar slipped to 89.63 Japanese yen from 90.15 yen.
The economy will grow at a pace of around 2.5 percent in the October-December quarter, according to projections made by analysts at Wells Fargo, IHS Global Insight and Moody's Economy.com. If accurate, that would mark a slowing from the projected growth of at least 3 percent that many economists think occurred in the just-ended third quarter.
The economy shrank at a rate of 0.7 percent in the April-June period, the Commerce Department said Wednesday.
The third quarter's performance is expected to mark a turning point for the economy, providing the strongest signal yet that the worst recession since the 1930s is over.
The Chicago Purchasing Managers Index fell to 46.1 in September rather than rising to the 52 that economists expected. The index, considered a precursor to the national Institute for Supply Management index to be released on Thursday, pointed to a Midwestern manufacturing industry that is weaker than had been expected.
Traders are waiting to see whether there will be a significant drop in the number of jobs cut nationwide during September. Investors also are concerned about the unemployment rate.
The dollar, a traditional safe-haven currency, has taken a hit in recent months as signs of economic recovery emerge around the world. Positive economic news often helps equities, emerging market currencies and other riskier investments.
In other late trading Wednesday, the dollar dropped to 1.0685 Canadian dollars from 1.0837 late Tuesday, and slipped to 1.0357 Swiss francs from 1.0374 francs.
