Dollar flat in New York

The US dollar erased its gains to trade flat against a basket of major currencies on Thursday after US data suggested growth was perking up after a dismal first quarter but was not robust enough to give a decisive lift to the dollar. Analysts said data on consumer spending and claims for jobless benefits provided short-lived relief after a larger-than-expected downward revision to first-quarter US gross domestic product on Wednesday.
The results failed to underpin the greenback, however, as traders later viewed the data as being consistent with a continued accommodative stance from the Federal Reserve. "There is really nothing substantial to hang your pro-dollar thesis on right now," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. "There is nothing unequivocally in the data to suggest rates are going higher." The Commerce Department said consumer spending increased 0.2 percent in May after being flat in April. Spending, which accounts for more than two-thirds of US economic activity, had been forecast rising 0.4 percent.
In a separate report, the Labour Department said new applications for state unemployment benefits slipped 2,000 to a seasonally adjusted 312,000 for the week ended June 21. The reading was slightly higher than expectations. Analysts said a report from Market News International stating that the European Central Bank may not have reached the lower bound in interest rates weakened the euro and boosted the dollar earlier in the day, but that the knee-jerk reaction faded. Analysts also said traders discounted hawkish comments from Fed official James Bullard on monetary policy as less crucial to the central bank's outlook. "Yellen is steering the bus," said Schlossberg of BK Asset Management, in reference to Fed chair Janet Yellen.
The US dollar index, which measures the dollar against a basket of six major currencies, was last flat at 80.222. The euro was last down 0.14 percent at $1.36095. The dollar slid 0.14 percent against the yen to 101.720 on safe-haven bids for the Japanese currency following modest weakness in US stocks. The dollar was up 0.1 percent against the Swiss franc at 0.8935 franc.
The British pound edged 0.26 percent higher against the dollar and last traded at $1.70245. Traders said measures from the Bank of England to cool the UK housing market by tightening lending norms bolstered hopes of higher interest rates. "Tighter lending standards reinforce the idea that the economy is doing better and that higher rates are coming sooner probably rather than later," said Joseph Trevisani, chief market strategist at WorldWideMarkets in Woodcliff Lake, New Jersey. Lower yields also kept the dollar weak. The benchmark 10-year US Treasury note was last up 8/32 in price to yield 2.53 percent.