LONDON (MarketWatch) -- The U.S. dollar, aided by waning appetite for risky assets, gained back some ground versus major rivals Thursday, a day after sinking to a fresh 14-month low versus the euro and a trade-weighted basket of currencies.
A 13.9% year-on-year rise in Chinese industrial production and an 8.9% rise in third-quarter gross domestic product, while impressive, were "not quite as strong as some had been hoping," wrote strategists at BNP Paribas. Read more about China's economic data.
The GDP rise outpaced the 7.9% expansion in the second quarter, and was broadly in line with a 9.1% rate anticipated in a survey of economists by Dow Jones Newswires.
Equity markets declined, allowing the dollar, which has tended to move in the opposite direction, to regain some ground. U.S. stock index futures were pointing to a slightly lower open for Wall Street in the wake of Wednesday's weak finish. See Indications.
European equities were also on the defensive. Oil and gold futures were also lower. Read Europe Markets.
The U.S. economic calendar on Thursday includes weekly initial jobless claims at 8:30 a.m. Eastern, followed by leading indicators at 10 a.m. and a home-price gauge for August.
The dollar index (DXY 75.37, +0.40, +0.53%) , a measure of the U.S. currency against a trade-weighted basket of rivals, traded at 75.360, up from 74.983 in North American activity late Wednesday, when it hit a fresh 14-month low.
The euro traded at $1.4974, sliding from $1.5040 a day after breaching the psychologically important $1.50 level for the first time since August 2008. Read more about the euro's rise.
The debate over the weak dollar remains a key theme in currency markets, wrote strategists at UniCredit MIB in Milan. Worries that European officials may step up efforts to talk down the single currency after the break above the $1.50 level could slow the currency's rise, "but buying on dips is favored ahead of the $1.52 target," they wrote.
A reversal would come only with a move below $1.4850, they said.
From a technical standpoint, the euro isn't overbought despite the recent rally, and bullish momentum is "fairly strong," wrote Nicole Elliott, technical analyst at Mizuho Corporate Bank, in a research note.
"Futures volume is about triple what it was at the beginning of this century, but not open interest, suggesting a lot of small speculators," she said. "Many have missed the U.S. dollar's generalized weakness."
The pound slipped briefly below $1.6500 and traded hands in recent action at $1.6543, down from $1.6630 Wednesday.
Losses were extended after September British retail sales volumes posted no change from August, falling short of expectations for a 0.5% monthly rise. See full story.
Remarks by Bank of England Deputy Gov. Paul Tucker also weighed on the pound, analysts said.
In an interview with a Scottish newspaper, Tucker said the bank's asset-purchase program could be extended if needed. BOE policy makers must decide next month whether to extend the program, which is due to complete currently planned purchases by early November, or to pause bond purchases.
The program, which is designed to create new money and boost the overall economy by lifting nominal spending, is viewed as a drag on the pound.
The dollar traded at 91.29 yen versus the Japanese currency, compared to 91.03 yen Wednesday.
The Swedish krona lost ground versus the euro. The Swedish Riksbank, the nation's central bank, on Thursday left its key lending rate unchanged at 0.25%, as expected, and said it continued to expect the rate to remain at that level until the third quarter of next year.
The bank also decided to provide an additional 100 kronor ($14.6 billion) in fixed-term, 11-month loans to commercial banks, saying that additional measures were needed to help hold down interest rates and to ensure that loose monetary policy is effective.
