Dollar reverses course despite positive US data

AP News
Posted: Mar 14, 2013 4:17 PM

NEW YORK (AP) — The dollar fell against world currencies on Thursday, despite economic data suggesting that the U.S. recovery is strengthening.

The Labor Department reported that applications for unemployment benefits fell to a five-year low last week. Government figures also showed a narrower U.S. trade deficit and mild inflation outside of a spike in gas and drug prices.

While the encouraging news boosted U.S. stocks, it was not enough to sustain early gains in currency markets.

The euro rebounded to $1.30 from $1.2961 late Wednesday. Earlier in the day, the 17-nation currency hit new lows versus the dollar for the year. That came after the Bank of Italy ordered Italian banks to increase their provisions for covering bad loans and as European Union leaders gathered for their latest summit in Brussels. Thousands of workers protested the meeting, demanding an end to austerity measures that have weighed on the continent's economies.

The dollar slipped to 96.02 Japanese yen, up from 96.04 yen.

Japan's lower house of Parliament endorsed Prime Minister Shinzo Abe's choice to lead the nation's central bank. Haruhiko Kuroda is expected to ease Japan's monetary policy. There is some question whether other nominees will make it through both houses, however, which could complicate Abe's plans.

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The British pound rose to $1.5081 from $1.4927. A report that Qatar is investing 10 billion pounds in infrastructure in Britain seemed to help the currency, Michael Hewson, senior market analyst for CMC Markets, wrote in a note to clients.

The dollar fell to 0.9473 Swiss franc from 0.9526 Swiss franc and to 1.0223 Canadian dollar from 1.0272 Canadian dollar.