NEW YORK (MarketWatch) -- The dollar declined versus major rivals Thursday after the U.S. reported that its economy returned to growth in the third quarter, boosting stocks and reducing the appeal of the relative safety of the greenback.
A separate report showed jobless claims dropped less than expected in the latest week, signaling the coast is not all clear.
"Selling U.S. dollars on improved risk appetite continues to be the trade," strategists at Barclays Capital said.
With a boost from massive government stimulus measures that supported consumer spending and residential investments, U.S. gross domestic product rose 3.5% in the third quarter after plunging by 3.8% in the past year. See story on GDP.
The dollar index (DXY 76.14, -0.28, -0.37%) , which tracks the performance of the greenback against a basket of other major currencies, traded at 76.161 in recent action, down from 76.456 in North American trading on Wednesday.
The euro rose to $1.4786, compared to $1.4713 late Wednesday. The dollar traded at 91.27 Japanese yen, from 90.80 yen on Wednesday.
The British pound gained 0.5% versus the dollar to $1.6473.
"The dollar and the yen took a shot to the chin after the better GDP and consumption data, as equity index futures rallied," analysts at Action Economics said.
Overshadowed by the GDP report, the Labor Department said separately that first-time claims for state unemployment benefits inched lower in the week ending Oct. 24, down 1,000 to 531,000. The consensus forecast of Wall Street economists was for claims to fall to 524,000.
The euro was also supported from earlier local data. The European Commission's economic sentiment indicator posted a bigger-than-expected October rise. The index for the 16-nation euro zone rose to 86.2 from 82.8 in September, compared to expectations for an increase to 84.5.
