BLBG: Dollar Falls Versus Euro on German Confidence Before GDP Data
Nov. 24 (Bloomberg) -- The dollar fell versus the euro, erasing an earlier gain, after German business confidence rose more than forecast in November.
The yen rose against all 16 of its most-active counterparts before the release of data forecast to show the U.S. economy expanded at a slower than initially estimated pace in the third quarter. The currency pared gains as U.S. stock futures swung to a gain after the German confidence data. Currencies were mixed on speculation traders exited bets against the dollar before the U.S. Thanksgiving holiday.
“This move in the euro-dollar has been a retracement of the morning move spurred by strong IFO numbers and taking out of weak stops at 1.4960,” said Stephen Bellamy, a G-10 currency trader at Saxo Bank A/S in Copenhagen. “The market sentiment for upcoming U.S. data this afternoon is that it will be a positive surprise and this would explain why stocks are buoyant leading into the New York session,”
The dollar was at $1.4972 at 8:20 a.m. in New York, from $1.4961 yesterday and after strengthening to $1.4889 earlier. The Japanese currency was at 88.55 against the dollar, from 88.97. It rose 0.4 percent to 132.58 per euro.
The MSCI World Index of shares slid 0.1 percent after earlier dropping as much as 0.6 percent, and futures for the Standard & Poor’s 500 index rose 0.2 percent after falling 0.4 percent earlier.
“In the current environment a weak U.S. gross domestic product number weighs on sentiment,” said Antje Praefcke, a currency analyst at Commerzbank AG in Frankfurt. “Traders are a little more sensitive to sentiment changes because they want to get out of positions ahead of the long U.S. weekend.”
The U.S. government’s revised figures for third-quarter gross domestic product, due today, may show the world’s largest economy expanded at a 2.8 percent annual rate, compared with the 3.5 percent estimated last month, according to a Bloomberg News survey. The revision will reflect a bigger trade gap and weaker retail sales in September, economists said.
To contact the reporter on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net
