(Recasts after start of European trade, changes dateline from
* Dollar falls back from a 14-year-high on profit-taking
* Several U.S. economic indicators due Thursday
* Euro shows no impact so far from Monte dei Paschi
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Jemima Kelly
LONDON, Dec 22 The dollar dipped for a second
day on Thursday as traders booked profits ahead of a batch of
U.S. data later in the day, though the greenback was still
trading less than a percent away from a 14-year high touched
earlier in the week.
The U.S. currency surged last week when the U.S. Federal
Reserve hinted that interest rates would be increased three
times in 2017, after its first rate hike in a year, with the
dollar index - which measures the greenback against six major
peers - hitting its highest since December 2002.
It has gained more than 5 percent since Donald Trump was
elected as U.S. president six weeks ago, with investors betting
that the president-elect's planned tax cuts and increased
spending in areas like infrastructure will boost growth and
inflation, leading to higher interest rates.
The dollar edged down 0.1 percent on Thursday, having also
fallen around a quarter of a percent on Wednesday. But analysts
said this week's moves must be viewed in the context of thin
liquidity, and there was no clear evidence to suggest the
dollar's rally had run out of steam.
"In the months ahead I'm not seeing any signs that that's
turning," said HSBC currency strategist Dominic Bunning, in
"What we might be seeing is when you've had such a strong
run, like we've seen in the dollar, and you go into a period
where liquidity is thin ... people take profit and close out
some positions, so I think that's why we're getting some
consolidation coming through in the dollar at the moment."
While trade is expected to slow further ahead of Christmas
on Sunday, the market's near-term focus is on U.S. economic
indicators due on Thursday, including revised GDP for July to
September, durable goods orders for November, and weekly initial
"The market is relatively quiet in a holiday mood, but if
the U.S. economic data is worse than the market expects, the
dollar is likely to be sold further," said Kumiko Ishikawa, FX
market analyst at Sony Financial Holdings in Toyko.
The euro was up 0.2 percent at $1.0440, rebounding
from $1.0352 on Tuesday, the lowest since January 2003.
However, the common currency could come under pressure as
investors contemplate the future of the ailing Monte dei Paschi
di Siena bank, Italy's third largest lender, some
The world's oldest bank has all but failed to pull off a
last-ditch private sector rescue plan, making a state rescue
appear to be inevitable, sources said on Wednesday.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Yuzuha Oka in Tokyo; Editing by Alison