Greenback up versus euro on China GDP, US bank hopes


The US dollar advanced against the euro in Asian trade on Monday as markets reacted calmly to China's growth slowdown and took heart from the earnings prospects of US banks, analysts said.

The euro fetched $1.2237 in morning Asian trade compared to $1.2248 in late New York trade on Friday. The European currency also slipped against the yen, buying 96.83 yen from 97.08 yen.

The US dollar traded at 79.12 yen from 79.17 yen on Friday.

China's second-quarter gross domestic product figures, released on Friday, largely met analyst forecasts, providing support to the greenback. The United States is China's biggest trading partner.

"The Chinese GDP data came better than expected," Justin Harper, market strategist for IG Markets Singapore, told AFP.

"It was coupled with the corporate earnings from JP Morgan which showed much firmer footing."

US banking giant JPMorgan Friday released its earnings report showing a $5 billion second-quarter profit, even after accounting for $4.4 billion in trading losses.

The profit was more than double previous estimates, sparking hopes of "a better than expected earnings season across the board for the big banks", Harper said.

Traders were also looking to US Congressional testimony from Federal Reserve chairman Ben Bernanke on Tuesday and Wednesday for any hint on a third round of quantitative easing, DBS Group Research said in a report.

"As far as the market is concerned, it is a question of 'not if, but when' the Fed will move towards a third round of quantitative easing measures or QE3," the report said.

But DBS Group Research said the odds for QE3 to take place in the second half of this year were dampened by minutes of a Fed report in June showing officials were more keen on a patient stance to boost the economy than pumping money in.

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