Dollar Pulls Back After 11-Week High Versus Euro

Washington (May 15)  The dollar briefly touched its highest in 11 weeks versus the euro on Thursday, but leveled off after a string of disappointing US economic data.

The news out of Europe was little better, as eurozone gross domestic product grew only 0.2% sequentially, the same rate as seen in the fourth quarter, Eurostat reported.

Economists had forecast the rate to double to 0.4%.

The GDP figures all but cement expectations that the European Central Bank will offer stimulus in June, hurting the value of the euro.

The dollar rose to USD1.3660 before pulling back near USD1.37 .

Early gains also evaporated versus the sterling, with the buck sliding back to USD1.68 by mid-day.

A second day of weakness saw the dollar slip to Y101.40 versus the yen.

With prices for gasoline, shelter, and food all rising, the Labor Department released a report on Thursday showing that US consumer prices increased in line with economist estimates in the month of April.

The Labor Department said its consumer price index rose by 0.3% in April after edging up by 0.2% in March. Economists had expected consumer prices to rise by about 0.3%.

Meanwhile, homebuilder confidence in the US unexpectedly deteriorated in the month of May, the National Association of Home Builders reported, with the homebuilder confidence index dropping to its lowest level in a year.

The report showed that the NAHB/Wells Fargo Housing Market Index edged down to 45 in May from a revised 46 in April.

Meanwhile, the Federal Reserve said industrial production fell by 0.6% in April following an upwardly revised 0.9% increase in March.