Forex - Dollar gains on soft U.S. economic growth data

The dollar rose against most major currencies on Thursday after U.S. fourth-quarter gross domestic product growth rates missed expectations, which bolstered the greenback's appeal as a safe harbor.

In U.S. trading on Thursday, EUR/USD was down 0.53% at 1.3067.

The Commerce Department reported earlier that the country's fourth-quarter GDP was revised up to 0.1% from an initial estimate for a 0.1% contraction, though the figure missed expectations for 0.5% growth.

While not all U.S. indicators released Thursday were gloomy, soft growth numbers served as the greenback's chief steering current.

The Department of Labor reported that weekly initial jobless claims dropped 22,000 last week to a seasonally adjusted 344,000, compared to expectations for a decline of 6,000 to 360,000.

Elsewhere, manufacturing activity in the Chicago-area expanded faster than expected in February, hitting an 11-month high, according to industry data.

The MNI Chicago purchasing managers’ index rose to a seasonally adjusted 56.8 in February from a reading of 55.6 in January, beating out analysts' calls for a February reading of 54.3.

A reading above 50.0 indicates expansion, while below indicates contraction.

Meanwhile, soft inflation data out of Europe sparked talk of ECB action to stave off deflationary pressures, which weakened the euro and further boosted the dollar's appeal.

The eurozone's consumer price index rose 2.0% on year in January, in line with expectations.

However, core inflation rates, which are stripped of volatile food and energy prices, rose 1.3%, missing market expectations for a gain of 1.5%, which sparked talk of an ECB move to stimulate the economy, which would weaken the single currency in the process.

Elsewhere in Europe, an electoral impasse in the Italian Senate continued to fray nerves as well.

The greenback, meanwhile, was down against the pound, with GBP/USDtrading up 0.09% at 1.5170.

The dollar rose against the yen, with USD/JPY trading up 0.53% at 92.72, and was up against the Swiss franc, with USD/CHF trading up 0.76% at 0.9368.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.66% at 1.0299, AUD/USD down 0.16% at 1.0218 and NZD/USD trading down 0.11% at 0.8268.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.54% at 82.05.

On Friday, the U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity, official data on personal spending and revised data on consumer sentiment from the University of Michigan.

Federal Reserve Chairman Ben Bernanke is to speak in San Francisco.