FOREX-Dollar gains slightly after U.S. data fails to derail growth outlook

Thu Jun 26, 2014 10:52am EDT

Related Topics

* U.S. consumer spending up slightly less than forecast

* Weekly U.S. jobless claims up slightly more than expected

* Sterling near recent highs after BoE's housing measures

By Sam Forgione

NEW YORK, June 26 (Reuters) - The U.S. dollar edged higher against a basket of major currencies on Thursday after U.S. data on consumer spending and jobless claims did not stray far enough from expectations to disturb optimism surrounding economic growth.

The Commerce Department said consumer spending increased 0.2 percent in May after being flat in April. Spending, which accounts for more than two-thirds of U.S. economic activity, had been forecast rising 0.4 percent.

In a separate report, the Labor Department said new applications for state unemployment benefits slipped 2,000 to a seasonally adjusted 312,000 for the week ended June 21. The reading was slightly higher than expectations.

"The fact that (consumer spending) came in pretty much on expectations has led the market to believe we've got a reprieve here from weaker data," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York. The dollar fell Wednesday after a weaker-than-expected revision of first quarter U.S. gross domestic product.

He also said that the weekly jobless claims, which came in slightly higher than the estimate of 310,000 according to a Reuters poll of economists, was not a marked enough increase to derail economists' optimistic estimates for U.S. second quarter GDP growth.

The U.S. dollar index, which measures the dollar against a basket of six major currencies, was last up 0.11 percent at 80.314. The euro was last down 0.29 percent at $1.3588.

The dollar slid 0.31 percent against the Japanese yen to 101.545 on safe-haven bids following modest weakness in U.S. stocks. The dollar was up 0.26 percent against the Swiss franc at 0.8950 franc.

The British pound edged 0.18 percent higher against the dollar and last traded at $1.7008. Traders said mild measures from the Bank of England to cool the UK housing market by tightening lending norms failed to dampen sentiment.

Traders also said the impact of surprisingly less hawkish comments from BoE Governor Mark Carney earlier in the week had diminished.

"Markets weren't too flustered today by the lending provisions that were announced," said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities in New York. "Markets are starting to get past Carney's latest comments," he added.

The dollar rose despite lower yields on U.S. government bonds. The benchmark 10-year U.S. Treasury note was last up 9/32 in price to yield 2.53 percent.

On Wall Street, the benchmark S&P 500 was down 0.52 percent, or 10.10 points at 1949.43.

(Reporting by Sam Forgione; Editing by Meredith Mazzilli)

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