By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The U.S. dollar lost ground against major rivals on Thursday, giving back some recent gains.
The dollar index (DXY 79.83, -0.17, -0.21%) ,a measure of the greenback’s performance against a basket of six other currencies, declined to 79.770 on Thursday, down from 79.985 in late North American trading Wednesday.
The dollar gained some ground this week, in tandem with a rise in U.S Treasury yields, amid hopes that a recently agreed-upon plan to extend tax breaks will boost economic growth in the U.S.
Worries that China will soon move to tighten policy again also could have helped appetite for the perceived safety of the dollar on Wednesday, after China announced that it will release inflation data on the weekend instead of next week.
But dollar gains proved to be relatively short-lived, with the greenback falling across the board on Thursday.
An auction of 10-year U.S. treasuries the previous day could have helped improve sentiment, with RBC Capital strategists stating: “consolidation saw the yield fall back toward 3.21% following the 10-year U.S. Treasury auction.”
The dollar bought 83.76 yen (USDYEN 83.9300, -0.0600, -0.0714%) on Thursday, down from ¥84.05 late Wednesday.
Yen investors could have been eyeing some better economic news from the country after Japan upwardly revised its reading for third-quarter gross domestic product.
The Cabinet Office stated that GDP rose an annualized 4.5% in the third quarter. That was above than last month’s 3.9% reading, Dow Jones Newswires reported.
The euro (EURUSD 1.3294, +0.0033, +0.2489%) traded at $1.3315 against the greenback, up from Wednesday’s $1.3268, although BNP Paribas strategists aren’t expecting continued strength for the single currency.
“We expect the euro to remain under pressure given the continued problems in the eurozone, especially with European Union officials now talking the euro lower, as well as the deterioration in global liquidity conditions,” strategists at BNP Paribas wrote.
The Australian dollar (AUDUSD 0.9859, +0.0068, +0.6944%) climbed 0.8% against the greenback, trading at 98.61 U.S. cents after the unemployment rate ticked down to 5.2% in November, from October’s 5.4% reading.
“The Australian dollar is sensitive to the unemployment rate given that the Reserve Bank of Australia is carefully watching labor supply and wages growth,” noted strategists at Barclays Capital.
The number of employed people rose a seasonally-adjusted 54,600 to 11.4 million while the number of unemployed people decreased 19,500 to 627,800. See story on decline in Australia’s jobless rate
“In an interesting perspective of Australia versus the U.S. … taking account of relative population size, this employment outcome today is roughly equivalent to a non-farm payrolls increase of 760,000,” wrote strategists at TD Securities.
The New Zealand dollar (NZDUSD 0.7485, +0.0013, +0.1739%) edged up 0.2% to 75 U.S. cents after the country’s central bank kept its key cash rate on hold at 3%.
The Bank of Korea also kept its benchmark interest rate on hold on Thursday, this time at 2.5%, with the central bank noting that risks remain to the domestic economy.
