Dollar Eases Versus Euro; Q2 GDP, Jobless Claims On Tap

The dollar lost ground versus the euro and extended its run of choppy dealing versus the yen Thursday morning as traders braced for the release of a preliminary reading on second quarter GDP.

In the wake of yesterday's hawkish comments from European Central Bank officials, the dollar eased to 1.4775 versus the euro. With the retreat the dollar pulled further away from Tuesday's 6-month high of 1.4629. Even with the Euro zone economy seen slowing in the second half of 2008, Bundesbank President Axel Weber told Bloomberg that talk of a rate cut was premature. Weber instead opened the door for more rate hikes next year, insisting that "the inflation outlook has not improved." The number of unemployed in Germany fell 40,000 in August from July after seasonal adjustments, the Federal Employment Agency reported Thursday. The dollar was steady versus the sterling Thursday morning, staying within a penny of yesterday's 2-year high of 1.8285. The Nationwide Building Society said Thursday that house prices in the UK declined 10.5% year-on-year in August, severe than the 8.1% fall in July. House prices fell more than the 9.6% expected by economists. The dollar continue to show a lack of direction versus the yen, slipping to 108.80 before rebounding back to 109.35. The pair has been bouncing back and forth between 108 and 110 since hitting a 7-month high of 110.65 two weeks ago. At 8:30 am ET, the Commerce Department will release its preliminary report on second quarter GDP, which is the broadest measure of economic activity. "Second quarter growth will probably be revised up sharply - to about a 2.9 percent annual rate from the already respectable 1.9 percent originally reported," predict the analysts at UBS. At the same time, the Labor Department will release its weekly jobless claims data. Analysts are expecting initial jobless claims to slip to 425,000 from the previous week's reading of 432,000. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved