* US GDP grows 5.7 pct in Q4, Chicago PMI also stronger
* Euro hits 6-1/2-month low versus dollar on fiscal woes
* Dollar index climbs to more than 5-month high
(Adds quotes, details, updates prices)
By Wanfeng Zhou
NEW YORK, Jan 29 (Reuters) - The dollar rose against major
currencies on Friday after a slew of stronger-than-expected
data boosted the view the U.S. economy was recovering faster
than other developed countries.
The euro fell below $1.39 to a 6-1/2-month low as investors
remained concerned about the fiscal health of some of the
smaller euro zone countries, such as Greece and Portugal.
The U.S. economy grew at a 5.7 percent clip in the fourth
quarter, the quickest pace in more than six years. Separate
reports showed business activity in the U.S. Midwest expanded
more than expected, while consumer sentiment hit a two-year
high. For details, see []
"The market is looking at this as a sign of U.S. resilience
and contrasting it with signs of weakness in the euro zone and
UK and even Asia," said Brian Dolan, chief currency strategist
at Forex.com in Bedminster, New Jersey. "So that's a reason the
dollar is benefiting, and I'd have to reckon with a higher
dollar in the coming weeks."
In midday trading, the dollar rose 0.6 percent to 90.39 yen
<JPY=>, after climbing to 90.92, the highest in about a week,
according to Reuters data.
The euro traded at $1.3870 <EUR=>, down 0.7 percent on the
day. It had fallen to $1.3863, the lowest since July 9,
according to Reuters data.
The euro was on track for a weekly loss of 2 percent
against the dollar, the worst performance in six weeks.
The European Union's monetary affairs commissioner, Joaquin
Almunia, said Friday an EU bailout for Greece was not possible,
sparking a widening in the premium that investors demand to
hold 10-year Greek government bonds rather than benchmark
German bunds. []
Despite Almunia's comments, official support was still
likely, said Credit Suisse currency strategist Ray Farris.
"If the Greeks fulfill their commitments, EU assistance
will be easier to give. There is official support, but none of
it is unconditional and the bulk of the heavy lifting has to be
done by Greece," he said.
The ICE Futures U.S. dollar index, a measure of the
greenback versus a basket of six major currencies, hit a high
of 79.444 <.DXY>, the strongest level since mid-August. It last
traded up 0.6 percent.
A spike in risk aversion stemming from China's increase of
bank reserve ratios and the credit worries in the euro zone has
helped boost the dollar in recent sessions.
"We continue to see these headlines about the sovereign
risk in the euro zone," said Amelia Bourdeau, senior currency
strategist at UBS in Stamford, Connecticut. "I don't think
market participants will go on to add risk ahead of the U.S.
payrolls report next Friday and I think the dollar will remain
strong on risk aversion."
The euro also tumbled against the Swiss franc, dropping to
1.4632 francs <EURCHF=R>, its lowest level since last March.
Wariness of Swiss central bank intervention capped a further
rise in the franc, traders said.
(Additional reporting by Steven C. Johnson and Vivianne
Rodrigues; editing by Leslie Adler)
