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NEW YORK : The dollar clawed back ground on Thursday against the euro and the yen as the market mulled whether the worst scenario for the greenback has already been priced in.
The dollar benefited from final fourth quarter growth figures for the US which while weak, were at least not revised lower, analysts said.
At 2100, the euro was quoted at 1.5778 dollars from 1.5845 in New York late on Wednesday. Some analysts were nervously watching the single currency this week approach its record high of 1.5905 dollars set on March 17.
Against the Japanese currency on Thursday, the dollar rose to 99.59 yen from 99.11 on Wednesday.
"The euro has come under modest selling pressure against the dollar but confidence in the dollar remains weak and hence we do not rule out further near-term gains," said Hans Redeker, global head of foreign exchange strategy at French bank BNP Paribas.
The US economy grew at a 0.6 percent annual pace in the fourth quarter of last year, the government said Thursday in a final unrevised reading.
The final estimate on fourth-quarter growth confirmed that the world's largest economy slowed markedly during the last three months of 2007 compared with a blistering 4.9 percent clip in the third quarter.
Most economists had expected the Commerce Department to leave gross domestic product (GDP) growth unrevised at 0.6 percent.
Neil Mellor at Bank of New York Mellon said the dollar's ability to hold above key levels suggest that the worst of the storm may be over for the greenback.
He said the dramatic rise of the euro may draw sharper reaction from European officials on the fear that it could curb economic growth in the eurozone.
"It is certainly possible that many investors are losing their appetites for the concerted push to send the single currency higher against the greenback," Mellor said.
"Indeed, this is all the more plausible when we consider the growing levels of agitation amongst eurozone officials and the use of G7-style warnings over excessive currency movement by Jean-Claude Trichet (amongst others) before last week's dramatic rally in the dollar."
In late New York trade, the dollar stood at 0.9940 Swiss francs after 0.9891 Wednesday.
The pound was at 2.0071 dollars after 2.0081.
- AFP /ls
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