FX round-up: GDP numbers lift dollar

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Date: Friday 29 Aug 2008

LONDON (ShareCast) - The dollar recovered from earlier weakness Thursday as investor cheered a stronger than expected US gross domestic product data and as oil prices turned lower.

The revised report by the Commerce Department said gross domestic product rose at an annual rate of 3.3% in the second quarter, beating expectations of growth around 2.7%.

The euro initially made headway versus the dollar after European Central Bank officials poured cold water on speculation the central bank will start cutting interest rates soon as the euro-zone economy slows.

That twinned with a surprisingly upbeat German unemployment report put the euro on strong footing, but as the session progressed, the dollar drew strength from its own domestic economic data, gains on Wall Street and as oil prices sank over $2.50.

Sterling headed towards a record low against the dollar Thursday as dismal figures on UK housing market and retail sales underlined deepening problems for the UK economy and sparked renewed fears of a recession.

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