December 22, 2016 / 3:58 PM / 7 months ago

FOREX-Dollar fades further from 14-year high; euro rises

4 Min Read

* Profit-taking pushes dollar further from 14-year-high
    * Data supports view of steady U.S. economic growth
    * Euro strengthens on hopes for Monte dei Paschi rescue

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Dec 22 (Reuters) - The dollar declined against a
basket of currencies on Thursday, pulling further away from the
14-year high it set earlier this week as traders booked profits
and brushed off mostly upbeat U.S. economic data.
    The government said new orders for U.S. capital goods rose
more than forecast in November and that the economy grew faster
in the third quarter than it had estimated. Jobless claims,
however, rose to their highest since June. 
    "We do have some profit-taking," said Stephen Casey, senior
currency trader at Cambridge Global Payments in New York.
"Trading is pretty thin."
    On light trading ahead of Christmas, the dollar index
, which measures the greenback against a group of six
major currencies, was down 0.3 percent at 102.74 after reaching
103.65 on Tuesday, its highest since December 2002.
    The dollar posted a series of multiyear highs after the U.S.
Federal Reserve's hint last week that it might raise interest
rates up to three times in 2017, which was one more than what
some traders had expected.
    The dollar rally that started six weeks ago has been
underpinned by bets that U.S. President-elect Donald Trump and a
Republican-controlled Congress would slash taxes and boost
federal spending, resulting in higher growth and inflation.
    As they awaited details on economic policies from the Trump
administration, traders and analysts cautioned that the dollar,
which has risen 5 percent on an index basis since Nov. 8, was
vulnerable to a further pullback. 
    Still most of them have not changed their longer-term
positive view of the U.S. currency.
    "The trend is definitely for a stronger dollar," Casey said.
"Any dip in the dollar will a buying opportunity."     
    While the dollar retreated for the second straight day, the
euro gained in the aftermath of plans to rescue Monte dei Paschi
di Siena, Italy's second-biggest bank.    
    The single currency hit a one-week high against the
dollar, rebounding from a nearly 14-year low of $1.0350 set on
Tuesday, Reuters data showed. It was last up 0.5 percent at
$1.0480.
    The euro was up 0.4 percent at 123.03 yen.
    The dollar was down 0.1 percent at 117.40 yen.
========================================================
    Currency bid prices at 10:32AM (1532 GMT)
 Description      Last           U.S. Close  Pct Change
                                  Previous   
                                  Session    
 Euro/Dollar      $1.0478        $1.0423     +0.53%
 Dollar/Yen       117.4200       117.5400    -0.10%
 Euro/Yen         123.10         122.53      +0.47%
 Dollar/Swiss     1.0232         1.0263      -0.30%
 Sterling/Dollar  1.2338         1.2352      -0.11%
 Dollar/Canadian  1.3467         1.3411      +0.42%
 Australian/Doll  0.7225         0.7235      -0.14%
 ar                                          
 Euro/Swiss       1.0726         1.0701      +0.23%
 Euro/Sterling    0.8493         0.8433      +0.71%
 NZ               0.6916         0.6897      +0.28%
 Dollar/Dollar                               
 Dollar/Norway    8.6817         8.6810      +0.01%
 Euro/Norway      9.0991         9.0496      +0.55%
 Dollar/Sweden    9.1639         9.2313      -0.18%
 Euro/Sweden      9.6055         9.6225      -0.18%
 
    
 (Additional reporting by Jemima Kelly in London Yuzuha Oka in
Tokyo; Editing by Lisa Von Ahn)

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