Sun, Jun 29, 2014 - Page 15 News List

Dollar falls most since April amid growth pessimism

Bloomberg

The US dollar weakened the most in almost three months this week as signs that the country’s economic growth is flagging damped speculation that the US Federal Reserve might raise interest rates sooner than anticipated.

The Bloomberg Dollar Spot Index, which tracks the US currency against 10 major counterparts, fell 0.5 percent to 1,005.04 in New York to post its third straight weekly decline and the biggest since April 11.

The greenback fell 0.6 percent to ¥101.42 this week. It has fallen 0.3 percent against the Japanese currency this month, 1.8 percent this quarter and 3.7 percent this year.

The US dollar depreciated 0.4 percent to US$1.3649 per euro this week and has slipped 0.1 percent this month against the 18-nation currency, while gaining 0.9 percent this quarter and 0.7 percent annually.

The yen rose 0.3 percent this week and 0.2 percent this month to ¥138.41 per euro.

New Zealand’s currency has been the best performer this month among the US dollar’s 16 major counterparts, gaining 3.2 percent.

The kiwi, as the New Zealand dollar is known, climbed after Reserve Bank of New Zealnd Governor Graeme Wheeler raised the benchmark interest rate to 3.25 percent earlier this month.

The currency gained 0.9 percent this week to 87.77 against the greenback.

“Given the momentum behind the kiwi at the moment, the prospects are really quite high in the near term that we reach the record,” said Kymberly Martin, a market strategist at Bank of New Zealand Ltd.

The US dollar fell against 13 of its 16 major peers this week as the US Department of Commerce on Wednesday reported that GDP shrank 2.9 percent in the first quarter, the most since 2009.

In London, the pound headed for its longest run of quarterly gains versus the greenback since 2007, as UK growth boosted the case for a jump in interest rates.

On Friday, a report from the British Office for National Statistics showed that the UK’s economic growth accelerated in the first quarter as business investment surged.

Sterling gained 0.1 percent this week and 1.7 percent this month. It has jumped 2.1 percent since the end of March.

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