NEW YORK (AP) - Benign U.S. economic data took the steam out of the dollar's recent advance Thursday, pushing it lower against the euro.
In a mixed session for the currency, the dollar initially strengthened against the euro, the Swiss franc and the yen early in the day - before slipping back a bit following the release of a smaller-than-expected decline in weekly jobless claims.
Alex Beuzelin, currency analyst at Ruesch International in Washington, said that while the dollar is clearly drawing support from the likelihood of the Federal Reserve raising interest rates soon, the road to that point isn't necessarily a straight one.
Thursday's data "hit home the point that monetary policy officials can remain 'patient,"' as to when they start the tightening cycle, Beuzelin said, repeating the key word for Fed-watchers. "There was nothing (in the numbers) to bring forward that timeline."
The latest weekly jobless claims fell by 9,000 but economists were expecting a fall of 20,000. The euro, which had fallen to a five-month low of $1.1781, rebounded on the claims report, while the dollar came off its five-month high against the Swiss franc of 1.3190 francs.
In late New York trading, the euro was quoted at $1.1899, up from $1.1848 late Wednesday. The dollar was quoted at 109.49 yen, up from 109.35 yen late Wednesday.
The dollar was quoted at 1.3089 Swiss francs, down from 1.3123, and 1.3558 Canadian dollars, down from 1.3589. The British pound fell to $1.7712 from $1.7743.
Certainly, the dollar seems to have some momentum behind it, particularly after Fed chairman Alan Greenspan told the Senate Banking Committee Tuesday that deflation appears to be "no longer an issue." That fueled expectations of a Fed rate hike, which would make it more appealing to the hold the dollar.
However, his follow-up testimony Wednesday before the Congressional Joint Economic Committee presented a more balanced view of inflation risk, saying that while rates "must rise at some point," inflationary pressures don't appear to be growing as of yet.
Meanwhile, on the eve of a two-day series of meetings in Washington between finance ministers and central bankers from the Group of Seven major nations, U.S. Treasury Secretary John Snow said he didn't expect big changes in the final communique compared to the group's previous statement released in the Florida resort town of Boca Raton.
The G7 finance ministers in February said that they generally supported flexible currency exchange rates but also worried about "disorderly" fluctuations.
"I wouldn't expect any alteration in that language," Snow said at a news conference.
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