29 April 2005, 16:06  U.S. Dollar drops against Euro

The U.S. dollar lost ground against the euro and the British pound Friday after data showed economic growth in the U.S. weakening in the first quarter. The dollar also slipped against the Japanese currency, falling to 105.16 yen from 105.99 yen. However, Japanese markets were closed Friday for Greenery Day, a national holiday. On Thursday, the dollar edged up after the U.S. data, with an inflation gauge tied to the gross domestic product report showing prices -- excluding food and energy -- rising at a rate of 2.2 percent in the first quarter of 2005, up considerably from a 1.7 percent rate in the fourth quarter of last year. To combat inflation, U.S. Federal Reserve policy-makers have boosted interest rates seven times since last June, and an additional increase is expected at the Fed's next meeting on Tuesday. But the dollar fell back as markets focused on the first-quarter GDP figure, which showed the slowest pace of expansion in two years.

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