Dollar dips on US economic data, easing Greece fears

NEW YORK - The dollar weakened against other major currencies on mixed US economic data and easing fears about Greece's fiscal crisis.

The euro traded at 1.3626 dollars at 2200 GMT in New York, up from 1.3546 late Thursday.

The dollar also weakened against the Japanese currency, sliding to 88.81 yen from 89.09 yen.

The euro firmed against the dollar as market fears about Greece's sovereign debt crisis faded slightly following reports of a possible helping hand from a German bank.

The modest improvement in risk sentiment weighed on the dollar, typically considered a safe-haven currency in times of uncertainty.

"We're probably seeing some profit taking" by investors who had speculated on a decline in the euro, said Vassili Serebriakov of Wells Fargo Bank, who pointed out the action could have been stepped up as the month draws to an end.

"The move appears corrective at this point; the market has not changed its mind on the euro," he said.

The analyst said the European single currency found support from "press reports that a German state-controlled bank may be buying Greek debt, and helping Greece with its debt."

The dollar, meanwhile, faltered as the market digested mixed US economic reports.

Fourth-quarter gross domestic product growth was revised upward to 5.9 percent from 5.7 percent, the Commerce Department said, in a report signaling positive momentum entering 2010.

The slight upward revision to GDP -- a broad measure of the country's goods and services output -- surprised most analysts who had expected no change in the first estimate.

But Kathy Lien at Global Forex Trading pointed out negatives in the GDP report.

"For GDP, personal consumption was revised down along with the price index," she said. "This is the story of the US economy -- growth with pockets of weakness."

A separate report Friday highlighted the persistent troubles in the housing market.

Sales of existing homes, by far the largest share of the market, fell 7.2 percent in January but were 11.5 percent higher than a year ago, the National Association of Realtors said.

"Under normal market conditions, a positive GDP report would trump a negative existing-home sales report. The fact that it didn't today reflects the extent to which the market has become bearish over the past several months," said Michael Woolfolk at Bank of New York Mellon.

Nick Bennenbroek, head of currency strategy at Wells Fargo Bank, said the dollar's weakness Friday and its mixed trading over the course of the week reflected an indecisive week for the forex markets.

"We suspect that corrective currency activity will be brief however. Markets will continue to anticipate the next Greek government bond issue as a key signal for the euro's direction, while next Friday sees the always important US jobs report," he said.

Over the medium term, he said, the bank's outlook remains for a firmer dollar against the majors. "We would use periods of dollar weakness as a buying opportunity