Dollar mixed on eve of US data

The dollar fell against the euro but rose versus the yen Thursday as markets sat tight on the eve of US growth data and a key speech on the economy by Federal Reserve chairman Ben Bernanke, traders said. In London deals, the euro rose to $1.4424 from $1.4414 late in New York on Wednesday. The dollar increased to 77.08 yen from 76.97 yen. Gold prices continued to slide on profit-taking after the precious metal had Tuesday surpassed $1,900 an ounce for the first time thanks to its status as a safe-haven investment in times of economic trouble. Analysts said the foreign exchange market would not see any major moves until Friday's much-awaited speech by Bernanke, which was expected to reveal whether the Fed would further loosen monetary policy to boost the US economy. "The better US data overnight has lowered expectations of QE (quantitative easing) but allowed some cautious optimism for the US economy," National Australia Bank said in a note. The US Commerce Department said Wednesday new orders for US durable goods rebounded 4.0 percent in July from June, which suggested manufacturing growth could pick up in the coming months. Friday's sees the publication of second-quarter US gross domestic product (GDP) data. "While leading indicators in the US have signalled a heightened recession risk heading into next year, this is yet to be backed up by hard economic data and as such it could prove too early to expect the Fed to restart QE so soon without spooking the market that it anticipates the worst," said Lee Hardman, currency economist at The Bank of Tokyo-Mitsubishi UFJ. "The stronger than expected US durable goods report yesterday highlighted that the economy was regaining momentum in July as supply disruptions from Japan were easing. "However, as the leading indicators have signalled it appears that the economy has taken a significant turn for the worse following the negative shock to confidence from the spike in uncertainty related to US and euro-zone sovereign debt developments in August. "Thus the outlook for the US economy is even more highly uncertain at the current juncture," Hardman added. On Thursday in London, the euro changed hands at $1.4424 against $1.4414 in New York late Wednesday, at 111.19 yen (110.94), £0.8813 (0.8801) and 1.1451 Swiss francs (1.1467). The dollar stood at 77.08 yen (76.97) and 0.7939 Swiss francs (0.7952). The pound was at $1.6366 (1.6374). On the London Bullion Market, gold prices dropped to $1,708.57 an ounce from $1,770 on Wednesday.