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Euro weakens vs. dollar, stays above $1.35

Published: January 31, 2013 | 8:58 am
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HONG KONG — The euro on Thursday weakened against the dollar but stayed above $1.35, while the greenback fell against some other major currencies such as the yen, after an unexpected contraction in the U.S. economy and the Federal Reserve’s subdued economic outlook.

The ICE dollar index , which gauges the greenback’s moves against a basket of six major global currencies, slipped to 79.264 by late afternoon in Tokyo from 79.302 in North American evening trade Wednesday.

Data released Wednesday showed the U.S. economy shrank 0.1% in the fourth quarter, disappointing markets that were expecting an expansion. The U.S. Federal Open Market Committee, meanwhile, said it’ll maintain an easy monetary-policy stance in view of the downside risks to the economy.

The euro slipped to $1.3551 from $1.3568, pulling back after a rally in the previous session. Against the yen, the euro was fetching 123.06 yen versus ¥123.64.

The dollar also slipped against the Japanese unit, reflecting risk-averse investor sentiment. It was at ¥90.82 versus ¥91.13.

The New Zealand dollar rose against the greenback after the country’s central bank left its policy interest rate unchanged at 2.5%, as was widely expected, and it cautioned about rising home prices. Read blog on RBNZ’s effort to talk down the kiwi.

The currency was buying 83.57 U.S. cents, appreciating from 83.19 cents before the Reserve Bank of New Zealand announced its decision.

Among other major currency pairs, the British pound was at $1.5822 as compared with $1.580, while the Australian dollar was fetching $1.0393 versus $1.0407.

The WSJ dollar index , a measure of the dollar’s moves against a slightly broader basket of rival currencies, slipped to 70.65 from 70.66.

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