Dollar Pulls Back As US, Germany GDP Beats Expectations

Washington (Nov 25)  The dollar weakened Tuesday, easing from 4-year highs versus a basket of major rivals as upbeat global economic news fueled appetite for riskier currencies.

An upward revision to US GDP reflected solid growth for the nation's economy in the third quarter, but failed to help the dollar extend its recent gains.

The Commerce Department today raised its estimate of gross domestic product to a 3.9% annual pace from the 3.5% rate reported last month.

Meanwhile, an increase in private consumption helped Germany avoid recession in the third quarter, as official data showed a 0.1% rise in seasonally-adjusted GDP.

This week's encouraging German economic data might compel the European Central Bank to delay additional stimulus, boosting the euro a bit.

The dollar slipped to near USD1.25 versus the euro, edging away from a recent 2-year high f USD1.2360.

There was little movement versus the sterling, leaving the buck at USD1.57, not far off last week's yearly highs.

The dollar pulled back for a second day against the yen, sliding to Y117.90. Last week the dollar hit a 7-year peak of Y119.

Minutes of the last BOJ meeting showed board members were afraid of the longer term impact of quantitative easing.

In other economic news, consumer confidence in the US unexpectedly deteriorated in the month of November, according to a report released by the Conference Board on Tuesday.

The Conference Board said its consumer confidence index dropped to 88.7 in November from a downwardly revised 94.1 in October.

Home prices in major US metropolitan areas experienced a broad based slowdown in the month of September, according to a report released by Standard & Poor's on Tuesday.

Source:  Alliance