NEW YORK: A report of strong US economic growth in the first quarter did little to bolster the dollar on Thursday, which stayed just off nine-week lows as a doggedly dovish outlook from the Federal Reserve and bold spending plans from the White House furthered expectations that inflation will rise.
Gross domestic product increased at a 6.4% annualized rate in the first quarter, the Commerce Department said, the biggest first-quarter increase in growth since 1984.
Against a basket of currencies, the dollar index rose in the New York session, last up 0.22% on the day to 90.718. Earlier in the session, the index hit its lowest level since Feb. 26. The earlier dip in the dollar also drove the euro to a nine-week high, though the single currency has since stabilized to around $1.211.
The Fed’s dovishness was in marked contrast to the Bank of Canada which has already begun to taper its asset buying, sending the dollar sliding to a three-year trough against the loonie of C$1.227.
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