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The dollar gained against the majority of its 16 most-traded peers amid concern the rate of global growth is slowing spurred demand for the haven of the U.S. currency. The greenback strengthened after a report showed U.S. factory orders trailed forecasts and the United Kingdom revised first-quarter growth downward. Bookings for U.S. durable goods, meant to last at least three years, advanced 2.2 percent, less than projected, after a revised 3.6 percent decline the prior month, data from the Commerce Department showed today in Washington. Economists forecast a 3 percent gain, according to the median forecast.
The 17-nation euro pared losses after a draft statement from European finance ministers showed governments are preparing to increase rescue funds. The euro was bolstered by a draft statement showing that European governments are preparing for a one-year increase in the ceiling on rescue aid to 940 billion euros ($1.3 trillion) to keep the debt crisis at bay. German Chancellor Angela Merkel said two days ago her country may back plans for the European Financial Stability Facility and the European Stability Mechnismto run in parallel. Italian, Portuguese and Spanish 10- year government bonds rose.
The yen strengthened amid speculation Japanese companies will repatriate overseas earnings before the end of the fiscal year on March 31.
Britain’s pound fell after a report showed the economy shrank more than first estimated in the fourth quarter, strengthening the case for the central bank to maintain asset purchases. U.K. gross domestic product dropped 0.3 percent from the previous three months, compared with an earlier estimate of 0.2 percent, data showed today. Bank of England Governor Mervyn King said yesterday he has an open mind on whether more monetary stimulus, or quantitative easing, is needed.
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