Dollar slips on U.S. growth slowdown

WASHINGTON (CIHAN)- The U.S. dollar retreated against major currencies Wednesday after data showed U.S. economy grew at a slower pace in the first quarter.

The real GDP increased at an annual rate of 0.1 percent in the first quarter, the slowest pace since the fourth quarter of 2012, according to the “aance” estimate released by the Commerce Department. The fresh figure was far short of analysts’ expectations.

The deceleration in real GDP growth resulted from slumping exports and private investment, which weighed on solid growth of personal consumption.

However, numbers on private-sector hiring in April came out positive. U.S. private payroll processor ADP said private sector employment added 220,000 jobs in April, the strongest gain in five months.
Moreover, the greenback weakened further after the Federal Reserve policymakers said they would keep the ultra-low interest rates for a “considerable time” after the bond-buying program ends.

After a two-day monetary policy meeting, the Fed reduced monthly bond purchases by another 10 billion dollars. This is the fourth consecutive reduction of the same size, and the Fed indicated further reductions in future meetings.
In addition, the Fed said “growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of aerse weather conditions.”

In late New York trading, the euro rose to 1.3872 dollars from 1.3810 dollars of the previous session, and the British pound increased to 1.6887 dollars from 1.6831 dollars. The Australian dollar climbed to 0.9296 dollars from 0.9274 dollars.

The dollar bought 102.11 Japanese yen, lower than 102.57 yen in the previous session. The dollar moved down to 0.8799 Swiss francs from 0.8837 Swiss francs, and it went down to 1.0947 Canadian dollars from 1.0956 in the previous session. (CihanXinhua)

SOURCE: CIHAN

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