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The second release of GDP for Q1 left the growth rate unchanged at 1.8%, falling short of expectations for an upwards revision to 2.2%. Weekly jobless claims also disappointed, rising to 424K. The “safe haven” yen and the Swiss franc are the biggest gainers.

EUR/USD is now climbing towards 1.42. GBP/USD is moving higher towards the high of 1.6330 seen earlier in the day. The moves are stronger in the Swiss franc and the Japanese yen: USD/CHF is now at 0.8675. USD/JPY fell to 81.57, erasing previous gains.

Given recent updated figures for the first quarter of 2011, there were high expectations for a upwards revision. The previous falls in jobless claims after a leap to 474K a few weeks ago also made some thinking that claims could return to sub 400K levels.

We have a repeat of the first release of GDP, which was also published on a Thursday, and also saw a disappointing unemployment claims figure.

The rise of safe haven currencies, the yen and the franc are due to fears that this serious US weakness will drag the whole world down.

Earlier in the day, the dollar fell and the Euro strengthened as China pledged to support the troubled Euro-zone countries by buying bonds. Spanish bond yields continued lower, and this helped the common currency make gains. But the troubles are far from over.

For more on the Euro, see the EUR/USD forecast.