Dollar holds gains vs. rivals after U.S. GDP report

San Francisco (Dec 20)  The dollar remained broadly higher against the other major currencies Friday, after the release of upbeat U.S. economic growth data, while the Federal Reserve's decision to begin tapering its stimulus program still supported the greenback.

During European afternoon trade, EUR/USD edged down 0.15% to 1.3642.

Official data showed that U.S. gross domestic product expanded by 4.1% in the third quarter, above initial estimates for 3.6% growth.

The dollar remained supported after the Fed announced Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January.

The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.

In the euro zone, data earlier showed that the Gfk German consumer climate index rose to 7.6 in December, from a reading of 7.4 the previous month. Analysts had expected the index to remain unchanged this month.

A separate report showed that German producer price inflation fell 0.1% in November, in line woth expectations, after a 0.2% decline the previous month.

The pound was lower against the dollar, with GBP/USD down 0.25% to 1.6330.

Official data showed that the U.K. current account deficit widened to GBP20.7 billion in the third quarter, from GBP6.2 billion in the three months to June. Analysts had expected the current account deficit to widen to GBP13.9 billion in the last quarter.

A separate report showed that the U.K. gross domestic product expanded by 0.8% in the third quarter, in line with previous estimates.

Official data also showed that public sector net borrowing in the U.K. rose by GBP14.8 billion in November, exceeding expectations for a GBP13.4 billion rise, after a downwardly revised GBP7.4 billion increase in October.

Elsewhere, the greenback was higher against the yen, with USD/JPY up 0.30% to 104.55 and steady against the Swiss franc, with USD/CHF inching up 0.03% to 0.8981.

Following a two-day meeting, the Bank of Japan kept its pledge to expand the monetary base by an annual JPY60 trillion to JPY70 trillion, in line with expectations.

The greenback was mixed against the Australian, New Zealand and Canadian dollars, with AUD/USD up 0.15% to 0.8879, NZD/USD slipping 0.23% to 0.8173 and USD/CAD up 0.52% to 1.0719.

In Canada, official data showed that consumer price inflation was flat in November, compared to expectations for a 0.2% fall. Core consumer price inflation, which excludes the eight most volatile items, ticked down 0.1% last month, confounding expectations for a 0.1% rise.

A separate report showed that retail sales in Canada slipped 0.1% in October, disappointing expectations for a 0.3% rise. Core retail sales, which exclude automobiles, increased by 0.4% in October, compared to expectations for a flat reading.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.20% to 80.93.