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The dollar sputtered on Thursday, moving back toward yearly lows against the euro after the government said that the US economy grew in the third quarter, signaling the end to the most brutal recession in decades.
With the risk trade back in play amid hopes that the recovery will take hold, the dollar hit the skids versus higher-yielding counterparts after seeing gains earlier this week.
The Commerce Department said its advance estimate showed that GDP increased at an annual rate of 3.5 percent in the third quarter compared to a 0.7 percent decrease in the second quarter. Economists had been expecting GDP to increase by 3.2 percent.
Still, questions remain about whether a recovery can be sustained once federal stimulus measures wind down.
The dollar turned lower versus the euro, dropping to 1.4840 from a 2-week high near 1.4700. With the loss, the dollar moved back toward a yearly low of 1.5059 from earlier this month.
The buck also fell sharply versus the sterling, losing almost two cents to 1.6600. While the buck has come under pressure of late versus the resurgent sterling, the pair remains near the middle of a multi-month range.
Rebounding commodity prices drove the dollar lower versus its resource-linked Canadian counterpart. After gaining significant ground over the past few sessions, the dollar turned back to C$1.0690.
Canadian raw materials prices and industrial prices fell unexpectedly in September, official data showed Thursday.
The dollar managed to push higher versus the yen as traders remained uncertain which low-yielding currency to carry. The buck rose to 91.60 after testing the 90 mark overnight. A few weeks ago, the dollar tested a 1995 low of 87.08.
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