* U.S. consumer spending up less than forecast
* Weekly U.S. jobless claims ease but higher than expected
* Sterling near recent highs after BoE's housing measures
By Sam Forgione
NEW YORK, June 26 The U.S. dollar erased its
gains to trade flat against a basket of major currencies on
Thursday after U.S. data suggested growth was perking up after a
dismal first quarter but was not robust enough to give a
decisive lift to the dollar.
Analysts said data on consumer spending and claims for
jobless benefits provided short-lived relief after a
larger-than-expected downward revision to first-quarter U.S.
gross domestic product on Wednesday.
The results failed to underpin the greenback, however, as
traders later viewed the data as being consistent with a
continued accommodative stance from the Federal Reserve.
"There is really nothing substantial to hang your pro-dollar
thesis on right now," said Boris Schlossberg, managing director
of FX strategy at BK Asset Management in New York. "There is
nothing unequivocally in the data to suggest rates are going
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.
Analysts said a report from Market News International
stating that the European Central Bank may not have reached the
lower bound in interest rates weakened the euro and boosted the
dollar earlier in the day, but that the knee-jerk reaction
Analysts also said traders discounted hawkish comments from
Fed official James Bullard on monetary policy as less crucial to
the central bank's outlook.
"Yellen is steering the bus," said Schlossberg of BK Asset
Management, in reference to Fed chair Janet Yellen.
The U.S. dollar index, which measures the dollar
against a basket of six major currencies, was last flat at
80.222. The euro was last down 0.14 percent at $1.36095.
The dollar slid 0.14 percent against the yen to
101.720 on safe-haven bids for the Japanese currency following
modest weakness in U.S. stocks. The dollar was up 0.1 percent
against the Swiss franc at 0.8935 franc.
The British pound edged 0.26 percent higher against
the dollar and last traded at $1.70245. Traders said measures
from the Bank of England to cool the UK housing market by
tightening lending norms bolstered hopes of higher interest
"Tighter lending standards reinforce the idea that the
economy is doing better and that higher rates are coming sooner
probably rather than later," said Joseph Trevisani, chief market
strategist at WorldWideMarkets in Woodcliff Lake, New Jersey.
Lower yields also kept the dollar weak. The benchmark
10-year U.S. Treasury note was last up 8/32 in price
to yield 2.53 percent.
(Reporting by Sam Forgione; Editing by Andrea Ricci)