U.S. Dollar Moves To The Downside After Seeing Early Strength

(RTTNews) - After seeing some strength earlier in the morning, the value of the U.S. dollar has turned lower over the course of trading on Thursday.

The U.S. dollar index is currently trading at 104.71, down 0.40 points or 0.4 percent, after reaching a high of 105.54.

The greenback is trading at 135.70 yen versus the 136.59 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0483 compared to yesterday's $1.0442.

The dollar has fluctuated in recent days amid uncertainty about the global economic outlook and the possibility of a recession.

Central bank chiefs have recently reaffirmed their resolve to bring down inflation despite threats to economic growth.

A report from the Commerce Department provided further evidence of an economic slowdown, showing personal spending increased by less than expected in the month of May.

The Commerce Department personal spending edged up by 0.2 percent in May after climbing by a downwardly revised 0.6 percent in April.

Economists had expected personal spending to increase by 0.5 percent compared to the 0.9 percent advance originally reported for the previous month.

Real personal spending, which excludes price changes, fell by 0.4 percent in May after rising by 0.3 percent in April.

"The larger than expected 0.4% fall in real consumption in May, together with downward revisions to gains in previous months, means we now expect consumption to rise by just 0.8% annualized in the second quarter, down sharply from our previous estimate of close to 3.0%," said Michael Pearce, Senior U.S. Economist at Capital Economics.

He added, "As a result, second quarter GDP growth is now on track to be closer to 1.0% annualized, down from our previous estimate of 2.7%, and we expect growth to remain below trend over the second half of the year too."

While the report also showed a slowdown in the annual rate of core consumer price growth, Pearce said the data does not present the "clear and compelling" evidence the Federal Reserve needs to shift to less aggressive rate hikes.

Meanwhile, a report separate released by the Labor Department showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 25th.

The Labor Department said initial jobless claims slipped to 231,000, a decrease of 2,000 from the previous week's revised level of 233,000.

Economists had expected jobless claims to edge down to 228,000 from the 229,000 originally reported for the previous month.