Dollar dips against euro before US growth data
LONDON: The dollar dipped against the euro on Thursday ahead of critical data which could show that the US economy emerged from a deep recession in the third quarter, analysts said.
In London morning deals, the European single currency rose to 1.4760 dollars, from 1.4714 dollars late on Wednesday, when the euro had fallen sharply as investors sought refuge in lower-risk assets.
Against the Japanese currency, the dollar firmed to 90.77 yen from 90.63 yen late on Wednesday in New York.
Investors were cautious ahead of the release of US gross domestic product (GDP) figures at 1230 GMT.
Recent US data were "far from being completely reassuring, fuelling doubts about the sustainability of the recovery," Calyon analyst Sebastien Barbe said.
But "a significant improvement in GDP growth is already priced in and it would likely take a significant surprise on the upside for this figure to counter the correction" in world stock markets, said Barbe.
Analysts expect the US economy grew about 3.2 percent in the third quarter, crawling out of recession.
Fresh worries over the US recovery surfaced after a surprise fall in September new home sales. On Wall Street, stocks had plunged to their worst loss of the month on Wednesday.
Growth-sensitive currencies such as the euro are likely to come under renewed pressure against the dollar and the yen as investors assess their outlook for the US economy, dealers said.
Meanwhile, European business and consumer confidence firmed in October for a seventh month running, an EU survey showed on Thursday, building on some encouraging news for Europe's struggling economies.
The European Commission's economic sentiment indicator for the 16 nations using the euro single currency rose to 86.2 points in October from 82.8 in September, continuing a climb away from a record low 64.6 points in March.
"The figures should help underpin the euro -- but the market seems to be in wait-and-see mode ahead of the release of US Q3 GDP growth first estimate later today," said Calyon analyst Frederik Ducrozet.
In London on Thursday, the euro was changing hands at 1.4760 dollars against 1.4714 dollars late on Wednesday, at 133.83 yen (133.40), 0.8976 pounds (0.8979) and 1.5109 Swiss francs (1.5103).
The dollar stood at 90.77 yen (90.63) and 1.0247 Swiss francs (1.0260).
The pound was at 1.6429 dollars (1.6383).
On the London Bullion Market, the price of gold rose to 1,034.75 dollars an ounce from 1,031.75 dollars an ounce late on Wednesday.