NEW YORK (AFP) — The dollar strengthened Thursday after US growth figures were revised higher, suggesting underlying strength in the economy despite the ravages of the subprime mortgage crisis.
Dealers said the dollar got a boost after first-quarter US growth was revised to a 0.9 percent annual pace from the initial estimate of 0.6 percent, confirming a slightly more positive set of recent data.
The US unit also was underpinned by weaker crude oil prices and a mixed report on economic confidence in the 15-nation eurozone.
The euro was at 1.5503 dollars around 2100 GMT, down from 1.5641 dollars late Wednesday.
Against the Japanese currency, the dollar rose to 105.52 yen from 104.71.
Dealers said the latest US data suggested the chances of another US Federal Reserve interest rate cut in the near future were very slight, and this supported the dollar, which has suffered against the euro because of a large yield differential.
"The decreasing likelihood of a US recession is likely to keep the dollar from getting considerably weaker this summer," said Greg Anderson of ABN Amro, citing the dollar's particular resilience against the euro, the pound and the Canadian dollar.
"As US rate futures are now pricing in a zero percent chance of a cut from the (US Federal Reserve) in June, further weakness (in the euro against the dollar) remains likely," said Matthew Foster-Smith at IFR Markets.
UBS analysts also noted that US central bank officials have been sounding a hard line on inflation, citing Dallas Fed President Richard Fisher who said it would be "unacceptable" for the Fed to be viewed as accepting higher prices.
"This marks a turnaround from the Fed's position during the initial stages of the credit crisis, when significant amounts of liquidity were provided," they wrote.
The euro meanwhile faltered after the European Commission's eurozone economic sentiment indicator was unchanged in May at 97.1 points, its lowest reading since August 25.
A breakdown of the data showed a drop in consumer confidence in both the eurozone and overall EU, which economists said was a bad sign.
"It is worrying to see that consumer confidence fell markedly in May and is now at its lowest level for 32 months," said economist Howard Archer of Global Insight.
The British pound was weaker after the Nationwide bank said that house prices fell by 2.5 percent in May from April, and registered the biggest annual decline for 17 years of 4.4 percent.
In late New York trade, the dollar was at 1.0496 Swiss francs, up from 1.0377.
The pound was at 1.9745 dollars, down from 1.9907.
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