(Corrects analyst's bank affiliation in paragraph 3)
* Traders look beyond worse-than-forecast GDP data
* U.S. unemployment claims ease
* Aussie jumps on brighter business-spending outlook
By Michael Connor
NEW YORK, May 29 The dollar trimmed early losses
against other major currencies on Thursday despite a government
report showing America's economy shrank at a worse-than-forecast
1 percent annual rate during the first quarter.
Though the U.S. Commerce Department reported the first
quarterly contraction in the U.S. economy in three years,
foreign exchange traders focused on signs U.S. economic activity
has shrugged off the chilling effects of North America's harsh
"Once you get beyond the headline number, and look under the
hood, things don't really look so bad," said Boris Schlossberg,
managing director of FX strategy at BK Asset Management in New
York. "Inventories were to blame for a lot of it and that bodes
well for the future."
The dollar, which had given back many of its gains on
Wednesday against the euro and the British pound, reclaimed some
of the day's losses after the GDP report.
The euro, which touched a three-month low under $1.36
this week as expectations solidified for a multi-pronged attack
on monetary policy by the European Central Bank next week, stood
at $1.3607 in New York trading for a gain against the dollar of
0.13 percent. Just before the GDP report, the euro was up 0.2
The U.S. dollar index, composed of six currency
pairs, was off 0.08 percent in late morning after being down
0.17 percent ahead of the GDP report, which was issued
simultaneously with Labor Department data showing fewer claims
for unemployment benefits.
"The forward-looking view of the world's biggest economy
looks much rosier, particularly after solid U.S. data this week
on durable goods and consumer confidence," said senior analyst
Joe Manimbo at Western Union Business Solutions in Washington.
"Better data of late suggest the U.S. economy has since
rediscovered the gas pedal with expectations of near or above 3
percent growth for the second quarter."
In other foreign exchange trading, the Australian dollar
jumped more than half a percent on data showing business
investment spending plans for 2014/15 have jumped to A$137
billion from an earlier estimate of A$125 billion.
"The interesting thing about the Australian economy is that
it is showing some signs of divergence away from China," said
Christian Lawrence, a currency strategist at Rabobank in London.
"There is an increasing feeling that Australia can weather
the slowdown in China better than people previously thought."
The Aussie, which is up 4.15 percent year to date, touched a
high on Thursday of $0.9312 and was last at $0.9283, up 0.52
percent for the day.
(Editing by W Simon)