US dollar treads water ahead of Chinese GDP data

April 15, 2014

New York (Apr 16)   The dollar moved little against other major currencies on Tuesday ahead of China's first-quarter GDP data, expected to show further slowing in the world's second-largest economy.

Around 2100 GMT, the euro ticked down to $1.3813 from $1.3820 at the same time Monday.

The dollar edged up to 101.94 yen from 101.82 yen. The European unit also gained slightly against the Japanese currency, buying 140.80 yen compared with 140.74 yen late Monday.

According to an AFP survey of 13 economists, the median forecast for China's first-quarter growth year-on-year was 7.3 per cent.

"The pace of Chinese growth will not only affect commodity currencies but could also have a significant impact on overall risk appetite and in turn other major currencies such as the dollar, euro and British pound," said Kathy Lien of BK Asset Management.

A mixed set of US economic indicators, including an encouraging increase in consumer inflation and an unexpected slowdown in New York state manufacturing activity, gave investors no reason to anticipate the Federal Reserve will deviate from its plan to wind down stimulus before year-end, analysts said.

Meanwhile, investors kept an eye on the Ukraine crisis. Russian Prime Minister Dmitry Medvedev on Tuesday warned Ukraine was on the verge of civil war as Kiev launched a military operation against pro-Kremlin militants in the separatist east.

"With the Ukrainian government authorizing troop deployment in the region, concern is mounting for tangible military conflict that would undoubtedly draw the ire of European Union and United States via a heavy-handed increase in economic sanctions, and perhaps worse, involvement in NATO," said Christopher Vecchio, currency analyst at DailyFX.

The dollar crept higher against the Swiss currency, to 0.8802 franc from 0.8796 franc late Monday.

The British pound was unchanged against the greenback at $1.6726 after official data showed that 12-month inflation fell a tenth point to 1.6 per cent in March, the lowest rate for four and a half years.


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