Bund Effect
The extra yield that investors receive for holding U.S. 10- year Treasuries instead of similar-maturity German bunds narrowed two basis points, or 0.02 percentage point, to 1.56 percentage points, the lowest on a closing basis since Feb. 5.
The 19-nation currency was also supported by gross domestic product data released Wednesday that showed an increase of 0.4 percent compared with the fourth quarter of 2014. It was the strongest growth since 2013.
A decline in U.S. unemployment applications wasn’t enough to support the dollar. Jobless claims decreased by 1,000 to 264,000 in the seven days ended May 9, a Labor Department report showed. The four-week average was the lowest since April 2000.
“It is really all about dollar weakness across the board,” said Keng Goh, a foreign-exchange strategist at Royal Bank of Canada in London. While RBC expects the Fed to increase rates in September, “no doubt some of the weakness in the data will probably diminish that conviction a little bit.”