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US dollar inches down on lacklustre US growth data
[TOKYO] The US dollar inched down early on Monday, nudged off a one-week high against a basket of currencies after Treasury yields declined on data showing the world's largest economy grew at a slower-than-expected pace.
The US currency was down 0.35 per cent at 114.660 yen after rising on Friday to 115.380, its highest since Jan 20.
The euro added to Friday's modest gains and was last 0.2 per cent higher at US$1.0715.
Data released on Friday showed US gross domestic product grew at a 1.9 per cent annualised pace in the final three months of 2016, compared with a 3.5 per cent rate in the third quarter. Analysts polled by Reuters had forecast a GDP growth pace of 2.2 per cent.
"The correlation between the dollar and US yields still remains relatively strong, and it is being weighed down after the lacklustre GDP release," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
"Some of the dollar's decline against the yen is also technical with the currency running into resistance on the charts. Concerns towards Trump's trade policies is another factor weighing on the dollar."
The US dollar has been volatile since Donald Trump's inauguration on Jan 20. Market focus has been caught between Mr Trump's protectionist slant, seen as negative for the greenback, and hopes for fiscal stimulus under the new president, considered a positive for the currency.
The US dollar index against a basket of major currencies fell to a seven-week low of 99.793 on Thursday before clawing back to a one-week high of 100.820 a day later. The index was down 0.2 per cent at 100.350 on Monday.
The pound was up 0.3 per cent at US$1.2593 against a broadly weaker US dollar, paring Friday's losses.
The Australian dollar was 0.1 per cent higher at US$0.7555 and the New Zealand dollar was also 0.1 per cent firmer, at US$0.7274.
Liquidity in Asia was lower than usual with financial markets in Hong Kong, China and Singapore shut for the Lunar New Year holidays.