Dollar dips ahead of US growth data - Risk appetite slims before GDP figures

Dollar dips ahead of US growth data - Risk appetite slims before GDP figures
By Neil Dennis
Copyright The Financial Times Limited 2009
Published: July 31 2009 11:16 | Last updated: July 31 2009 11:16
http://www.ft.com/cms/s/0/d36ffca2-7dba-11de-8f8d-00144feabdc0.html


The dollar remained on the slide on Friday, with markets in thrall of economic growth data to come from the US later in the day.

While equities were flat and profit taking set into the commodity markets, there was little appetite for risk ahead the GDP data. Currency markets were similarly subdued, with the dollar sticking with the theme of the previous session, when rebounding equity markets drove an uptick in risk appetite.

Sterling was one of the better performers, up 0.5 per cent to $1.6572, after a week of better-than-expected data and forecast-beating corporate results. Against the euro, the pound was up 0.1 per cent to £0.8520, and rose 0.5 per cent to Y158.34 versus the yen.

”Anomalous price action persists amid distorted and thin summer trading conditions as risk have assets performed well supported by better than forecast earnings results,” said Charles Diebel at Nomura.

Investors had also been casting nervous glances toward China, as conflicting and worrying sounds were made about the possible withdrawal of its loose monetary policy. Although the People’s Bank of China later said it would keep loose conditions for as long as needed, the dollar started the week with gains.

But on Friday, the euro climbed 0.3 per cent to $1.401, little perturbed by data showing falling consumer prices and rising unemployment in the eurozone.

The Canadian dollar added 0.3 per cent to C$1.0803, while the New Zealand dollar added 0.5 per cent to $0.6551.