Forex - Strong US jobless claims, PCE inflation data fail to help ailing dollar

LONDON (Thomson Financial) - Strong US data this afternoon failed to give
much of a boost to the dollar, with the euro merely coming very slightly off an
earlier new record high of 1.4189 usd.
US jobless claims figures showed first time claims for unemployment
insurance fell to their lowest level in more than four months last week. Claims
fell by 15,000 from the previous week to 298,000 and much better than
expectations for a reading of around 315,000.
Meanwhile, although other data showed a downward revision in US second
quarter annual GDP growth to 3.8 pct from 4.0 pct, measures of inflation were
revised up.
The overall PCE price index rose 4.3 pct in the quarter, revised from the
4.2 pct gain in the earlier estimate and the fastest rate in a year. Meanwhile,
the Federal Reserve's preferred measure of inflation, the core PCE price index,
was revised up to a 1.4 pct quarterly gain from the previous estimate of 1.3
pct.
The euro edged down only very slightly after the data, having hit a 1.4189
usd new record high. At 1.12 pm GMT, the single currency was trading at 1.4176
usd.
The dollar continues to be battered by a recovery in risk appetite and
growing expectations that other major central banks, including the European
Central Bank, will not follow the Federal Reserve's lead and cut interest rates.
Analysts also noted speculation in the market that US new home sales
figures, due for release at 2.00 pm GMT, will come in much worse than expected.