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1st LD Writethru: Dollar retreats as U.S. economy shrinks in 1Q

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(Globalpost/GlobalPost)

NEW YORK, May 29 (Xinhua) -- The U.S. dollar retreated against major currencies Thursday as the revised first-quarter U.S. growth rate unexpectedly fell negative.

The U.S. economy shrank at an annual rate of 1 percent in the first quarter due to weak trade and private investment amid the brutally cold weather, according to the Commerce Department's revised estimate of real GDP, which was released Thursday morning.

It was the first contraction since the first quarter of 2011 when the GDP decreased 1.3 percent. The surprising drop of U.S. economic growth raised speculation that the Federal Reserve may maintain its extremely accommodative monetary policy for a longer time, which pressured the dollar.

More on the economic front, U.S. jobless claims for last week stood at 300,000, a decrease of 27,000 from the previous week's revised level, the Labor Department reported Thursday. The decline was more than analysts had expected.

Moreover, U.S. pending home sales improved for the second straight month in April, with the pending home sales index increasing 0.4 percent to 97.8 in April from 97.4 in March, according to the National Association of Realtors. But the reading still trailed market consensus.

In late New York trading, the euro rose to 1.3602 dollars from 1.3594 dollars of the previous session, and the British pound increased to 1.6720 dollars from 1.6709 dollars. The Australian dollar climbed to 0.9290 dollars from 0.9266 dollars.

The dollar bought 101.73 Japanese yen, lower than 101.86 yen of the previous session. The dollar went down to 0.8977 Swiss francs from 0.8983 Swiss francs, and it moved down to 1.0840 Canadian dollars from 1.0882 Canadian dollars.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/140529/1st-ld-writethru-dollar-retreats-us-economy-shrinks-1q-0