Dollar edges higher as traders eye Europe, China

The dollar gained ground against the euro on Friday in choppy trade that was dictated by bond action in Europe and data from China and the United States. "The post-Easter rollercoaster ride continued its head-scratching turns through Friday's Asian and European trading hours, and pushed both the American and Canadian dollars into the green territory against a currency basket," said analysts at Travelex. By 2100 GMT the euro declined to $1.3078 from $1.3188 late in New York on Thursday. The vagaries of Europe's debt markets, particularly the see-sawing of Italian and Spanish bond prices, again loomed large. "Sovereign bond yields for both countries are higher, and the euro has so far failed to break back above 1.32 against the US dollar," said David Morrison at the trading group GFT. "Investors were rattled by the news that Spanish bank borrowing from the European Central Bank rose dramatically last month." Meanwhile risk was off as slower growth in China eclipsed better-than-expected earnings from two big banks and Internet giant Google. China said Friday its economy grew by 8.1 percent in the first three months of 2012, its slowest pace in nearly three years, but analysts forecast a pick-up in the second half of 2012. The dollar rose a little against the yen, reaching 80.91 yen against 80.91 yen the day before. The pound weakened to $1.5844 from $1.5958.