Forex - U.S. dollar higher on euro debt fears, China GDP

Investing.com - The U.S. dollar traded mostly higher against its major counterparts Friday as fears that the European Central Bank will be forced to reignite its bond purchase program and China’s disappointing GDP numbers resulted in safe haven greenback buying

During U.S trade, the dollar moved higher against the euro, with EUR/USD falling 0.44% to hit 1.3131.

The greenback gained strength when fears of the ECB resuming its bond repurchase program were triggered as Spanish government bonds moved toward a second - straight weekly decline signaling the respite in the debt crisis created by the ECB’s unlimited three year loans program may be ending.

German bunds, the euro zone benchmark government securities, advanced for the first time in three days.

Adding to the single currency bearishness, seventeen of the 22 economists surveyed by Bloomberg forecast that the ECB will be forced to resume its Securities Market Program to contain bond yields.

On Thursday, dampening greenback enthusiasm, the number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly according to governmental data..

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week rose to a seasonally adjusted 380K, from 367K in the preceding week whose figure was revised up from 357K.

Analysts had expected initial jobless claims to fall to 355K last week.
In addition, the U.S. trade balance fell less-than-expected last month.

In a report, Bureau of Economic Analysis stated that U.S. trade balance dropped to a seasonally adjusted -46.0B, from -52.5B in the preceding month whose figure was revised up from -52.6B.

Analysts had expected U.S. trade balance to fall -52.0B last month.
A lack luster Chinese GDP also helped the risk off sentiment.

China’s gross domestic product expanded just 8.1% from a year earlier in the first quarter, following an 8.9% advance in the last three months of 2011 adding to global growth fears and increasing safe haven buying in the greenback.

The U.S. dollar was higher against the pound, with GBP/USD falling 0.12% to hit 1.5940. 

On Thursday, U.K. official data showed that the goods trade deficit widened more than expected in February, as exports to countries outside the European Union dropped.

The Office for National Statistics said the goods trade deficit widened to GBP8.8 billion compared with a forecast of GBP7.7 billion and up from GBP7.9 billion in January. 

Meanwhile, the greenback was higher against the yen and against the Swiss franc, with USD/JPY gaining 0.17% to hit 81.04 and USD/CHF adding 0.44% to hit 0.9153.

In Japanese news Thursday, the governor of the Bank of Japan said the bank will pursue “powerful easing” to help overcome deflation and put the economy on a sustainable growth path.

Elsewhere, the U.S. dollar was higher against its Canadian and Australian yet lower against New Zealand counterparts, with USD/CAD gaining 0.01% to hit 0.9940, AUD/USD falling 0.27% to hit 1.0410 and NZD/USD rising 0.14% to hit 0.8288.

In Australia, the currency suffered on the dropping China GDP numbers as China is Australia’s largest trading partner.
 
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, climbed 0.36% to trade at 79.75.