On Thursday, the U.S. dollar dropped to a low of three weeks against the euro. The drop in the dollar came after weaker than expected data on the U.S. economy boosted expectations that the Federal Reserve, the country’s central bank, would keep its aggressive stimulus program in place longer.
All of the dollar’s gains were erased against the yen, which had been under huge selling pressure after a report detailing a proposed revision of the strategy of the public pension fund of Japan.
The economic data released included a revised rate of growth for the U.S. economy during the first three months of the year. The original figure was 2.5% released last month, but Thursday’s figure showed the economy only grew by 2.4%. Adding to the discouraging news was that new jobless claims for last week increased unexpectedly.
Analysts said the data was not earth shattering, but helped to lend to the scope of the Fed continuing its quantitative easing until the end of 2013.
However, analysts said a better judgment about when the QE would end, would come next week when the jobs report is released with the new number of nonfarm payrolls.
The euro was up to $1.303, its strongest level since May 10. Against the yen, the dollar was unchanged, after retreating earlier in the day.
Sources have said that the Government Pension Investment Fund in Japan is considering an approach that is more flexible to allocations that would let investment in local stocks grow in markets that are rallying.