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FOREX-Dollar slips as rally stalls after strong U.S. data

Published 30/11/2016, 07:50 am
© Reuters.  FOREX-Dollar slips as rally stalls after strong U.S. data
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* Dollar edges lower as market consolidation continues

* Dollar weaker since hitting nearly 14-year high Thursday

* OPEC meeting, Italian referendum, Fed meeting eyed (Updates to late U.S. market trading, adds quote)

By Dion Rabouin

NEW YORK, Nov 29 (Reuters) - The dollar fell on Tuesday as it consolidated its position against most major currencies after a roller-coaster 24 hours which traders say may be a precursor to three weeks of risk-packed events including the Federal Reserve's December policy meeting.

After rising across the board and gaining more than 1.2 percent against the safe-haven Japanese yen following the release of stronger-than-expected U.S. third-quarter gross domestic product numbers, the dollar retraced much of its gains on the day. a reading on U.S. consumer confidence that showed the index at its highest level since July 2007 did not dissuade investors from selling the greenback as its rally appeared to have run out of steam.

"When the ... GDP report was unable to drive the dollar higher, despite cementing the Federal Reserve case for a rate hike next month, traders used the occasion to book profits on the two-week, post-election surge in the greenback," said Joseph Trevisani, chief market strategist at WorldWide Markets in Woodcliff Lake, New Jersey.

The dollar index, which tracks the greenback against a basket of six major rivals, scaled to a nearly 14-year peak of 102.050 .DXY on Thursday before falling back on profit-taking and oil price jitters. It has continued to move lower this week.

On Tuesday it fell 0.35 percent to 100.980.

The dollar rose 0.4 percent against the yen at 112.40 yen JPY= . The euro EUR= rose 0.25 percent against the dollar to $1.0645.

The pullback in the dollar's upward trajectory since Thursday seemed more a consolidation than a correction, said Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co, and reflected the underlying trend in markets that are still expecting substantial fiscal stimulus from the administration of U.S. President-elect Donald Trump and Fed interest rate increases.

Additionally, Wednesday's meeting of the Organization of the Petroleum Exporting Countries on a potential oil output cut and Sunday's constitutional referendum in Italy still loom.

Sterling GBP= moved higher against the dollar, backed by data that showed lending to Britons expanded last month at the fastest annual pace in 11 years, while mortgage approvals were stronger than expected, bolstering the picture of resilient consumer demand after June's Brexit vote. pound GBP= rose 0.7 percent to $1.2506.

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