Bloomberg News

Dollar Lower as U.S. Economy Expands Less Than Forecast

April 27, 2012

The dollar remained lower against the yen and the euro after a report showed the U.S. economy grew less than forecast in the first quarter.

The greenback fell 0.6 percent to 80.53 yen at 8:47 a.m. New York time. It weakened 0.2 percent to $1.3249 per euro. The 17-nation currency declined 0.3 percent to 106.71 yen.

“Even though we did have slightly weaker GDP growth, personal consumption was fairly strong, so that offset things a bit,” said Kathy Lien, director of currency research at the online trading firm GFT Forex in New York.

The yen strengthened earlier against most of its major counterparts as investors sought safer assets even after the Bank of Japan expanded its asset-purchase program. The euro fell against the Japanese currency after Standard & Poor’s cut Spain’s credit rating and the nation’s unemployment rate jumped, adding to concern the region’s debt crisis is worsening.

U.S. gross domestic product, the value of all goods and services produced in the U.S., rose at a 2.2 percent annual rate, Commerce Department figures showed today in Washington. That followed a 3 percent pace in the prior quarter and compared with the 2.5 percent median forecast of economists surveyed by Bloomberg News.

While the Fed refrained this week from new actions to boost the economy, Chairman Ben S. Bernanke said after a two-day meeting the central bank is “prepared to do more” if necessary. Policy makers repeated a plan to keep borrowing costs “exceptionally low” until at least late 2014. The key interest rate has been at zero to 0.25 percent since December 2008.

To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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