LONDON — The dollar lost ground against the euro and yen on Thursday in the wake of recent disappointing US economic data and as traders awaited more key figures from the world's biggest economy amid quiet trading.
In London morning deals, the single currency rose to 1.4387 dollars from 1.4335 dollars in New York late on Wednesday, as markets wound down activities ahead of the Christmas and New Year break.
Against the Japanese currency, the dollar fell to 91.16 yen from 91.60 yen on Wednesday.
"The failure of the dollar to extend its gains this week is interesting because it does coincide with some disappointing US economic data," said Jane Foley, research director at online trading firm Forex.com.
"The downward revision to third-quarter US GDP this week highlighted the precarious position of the US economic recovery and served as a reminder on how dependent is was during the third quarter on government fiscal support," she added.
President Barack Obama meanwhile on Wednesday said he was "dissatisfied" with the US jobless rate, which fell in November to 10.0 percent, down from a 23-year high of 10.2 percent in October.
New US home sales and consumer spending data this week also disappointed traders hoping for a strong economic recovery and cooled speculation about an earlier-than-expected interest rate rise by the US Federal Reserve.
"Weak economic data has forced the US dollar to give up its gains," said Kathy Lien at Global Forex Trading.
The dollar may get a boost in thin pre-Christmas holiday trade if US economic data due out later in the day is better than expected, market watchers said.
Orders for US durable goods were estimated to have risen 0.5 percent in November after contracting by 0.6 percent in October, analysts said.
Dealers were also waiting for a report on weekly claims for jobless benefits in the United States, looking for clues on when the labour market will start to improve.
Elsewhere, the yen firmed as Japanese Prime Minister Yukio Hatoyama apologised Thursday over a growing political funding scandal, but said he would fight on despite the blow to his three-month-old government.
"I feel grave responsibility," Hatoyama told a news conference after prosecutors indicted his former aide for misreporting millions of dollars of donations.
But he added: "I've decided I should not give up on myself nor my job."
In London, the euro was changing hands at 1.4387 dollars against 1.4335 dollars late on Wednesday, 131.15 yen (131.32), 0.8988 pounds (0.8983) and 1.4897 Swiss francs (1.4888).
The dollar stood at 91.16 yen (91.60) and 1.0354 Swiss francs (1.0386).
The pound was at 1.6007 dollars (1.5956).
On the London Bullion Market, the price of gold gained to 1,105.30 dollars an ounce from 1,085.25 dollars late on Wednesday.
