U.S. Dollar Falls on Weak GDP and Employment Data
The U.S. dollar lost ground against other major currencies on Thursday. At the moment, the euro is standing at 1.4202 against the dollar, or 0.809% higher than Wednesday's close, while the British pound rose 0.558% to $1.6364. The dollar lost ground to the Japanese yen as well, falling 0.889% to ¥81.24. The value of dollar is in decline due to weak performance of the U.S. economy. First, the U.S. Q1 GDP growth fell below market expectations. According to government data, the U.S. GDP grew by 1.8% year-over-year in Q1, when most analysts expected it to grow by 2.2%. In the last quarter of 2010, the U.S. annual rate of GDP growth was 3.1%. Second, the U.S. economy reported more jobless claimants in the week ending May 21 than expected. While most analysts expected the number to fall to 400,000 from 414,000 the week before, the U.S. economy posted 424,000 jobless claimants.
Traders who believe the weak economic data will continue to reduce the value of U.S. dollar will be interested in the PowerShares DB US Dollar Index Bearish Fund (NYSE: UDN). Those traders who believe the U.S. economy can turn the corner soon will be interested in the US Dollar Bull Plus ETF (HDU).
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