August 1, 2009
The dollar fell against major currencies on Friday after a report showed that U.S. economy contracted less than expected in the second quarter.
The pace of decline in real GDP decelerated substantially in the second quarter to 1.0 percent from 5.5 percent in the first quarter, according to the U.S. Commerce Department. Most analysts have expected a decline of 1.5 percent.
But the report also showed some negative signs that the U.S. economic recession was deeper than previously estimated. The economic growth rate of 2008 was revised down from 1.1 percent to 0.4 percent.
With the exception of federal government spending, all the major components of real GDP were revised downward for 2008. In particular, personal consumption expenditures were revised down to show a drop of 0.2 percent in 2008 instead of an increase of 0.2 percent.
The Commerce Department also reported that U.S. personal consumption expenditures fell by 1.2 percent in the second quarter, worse than expected. Personal consumer spending accounts for two-thirds of U.S. economic activities.
The euro bought 1.4250 dollars in late New York trading compared with 1.4078 dollars it bought late Thursday. The pound rose to 1.6686 dollars from 1.6489 dollars.
The dollar fell to 1.0789 Canadian dollars from 1.0830 Canadian dollars, and fell to 1.0689 Swiss francs from 1.0880 Swiss francs. It fell to 94.79 Japanese yen from 95.60 Japanese yen.