U.S. Dollar Declines As Weak GDP Data Sparks Rate Cut Hopes

(RTTNews) - The U.S. dollar depreciated against its major counterparts in the New York session on Thursday, as the economic growth was revised down in the third quarter and initial jobless claims rose less than forecast last week, supporting hopes of a rate cut by the Federal Reserve early next year.

Data from the Commerce Department showed that real gross domestic product jumped by 4.9 percent in the third quarter, reflecting a downward revision from the previously reported 5.2 percent surge. Economists had expected the pace of GDP growth to be unrevised.

A separate report released by the Labor Department showed a slight uptick by initial jobless claims in the U.S. in the week ended December 16.

The Labor Department said first-time claims for U.S. unemployment benefits crept up to 205,000, an increase of 2,000 from the previous week's revised level of 203,000.

Economists had expected jobless claims to rise to 215,000 from the 202,000 originally reported for the previous week.

The Federal Reserve Bank of Philadelphia also released a report showing regional manufacturing activity unexpectedly contracted at an accelerated rate in the month of December.

The greenback touched 0.8562 against the franc, its lowest level since July 27. If the currency drops further, it may locate support around the 0.84 level.

The greenback fell to a 6-day low of 1.1002 against the euro and a 3-day low of 142.06 against the yen, off its early highs of 1.0935 and 143.56, respectively. The next possible support for the greenback is seen around 1.12 against the euro and 134.00 against the yen.

The greenback weakened to 1.2695 against the pound, from an early 1-week high of 1.2612. The currency may possibly face support around the 1.31 level.

The greenback slipped to 1.3312 against the loonie and 0.6292 against the kiwi, reversing from its early 2-day highs of 1.3371 and 0.6234, respectively. The greenback is seen finding support around 1.29 against the loonie and 0.64 against the kiwi.

The greenback dropped to near a 5-month low of 0.6791 against the aussie, easing from an early 2-day high of 0.6723. The greenback is poised to challenge support around the 0.70 level.