The dollar strengthened against its peers on Friday following the release of a series of varied economic data which revealed that the US economy could be balancing out after recent data indicated a down turn. Manufacturing output stabilized in April following a period of deceleration during the previous 5 months. The ISM manufacturing index posted a reading of 51.5 in April unchanged from March marking a 2 year low. US consumer sentiment in April jumped to a 4 month high. Construction spending declined 0.6% to an annual rate of $966.6 billion in March setting an 8 month low.

The euro weakened against the dollar with the pair down 0.22% trading just below its 1.12 handle towards the end of Friday’s close. The euro came off its 2 month high of 1.1289 on the back of solid US data which renewed optimism over the state of the US economy. The euro had been supported by inflation and bank lending data and the possibility that Greece was approaching reaching an agreement to secure bailout funds.

The pound weakened considerably against the dollar down to 1 week lows following the release of data which revealed a sudden draw down in growth within the UK manufacturing sector. Towards Friday’s close the pair was down 1.39% on the day trading at 1.5137. UK manufacturing purchasing managers’ index dropped to its lowest level in 7 months in April to a reading of 51.9 from 54.6 in March. Experts had forecast a decrease to 52.0. UK markets are closed on Monday.

The yen weakened against the dollar with the pair up over 0.6% at 3 week highs trading above its 120 handle as US data bolstered demand for the greenback. As the Bank of Japan recently announced there would be no adjustment to its monetary policy despite calls for more stimulus the pair is still bound to its tight range of late and has seen no indicators to trigger a breakout. Markets in Japan are closed on Monday.

The Australian, New Zealand and Canadian dollars weakened against the greenback as it recovered from recent losses and the market adjusted predictions as to when the Federal Reserve will increase interest rates. The Aussie dollar was down 0.78% on the day towards Friday’s close but still racked gains for its 4th consecutive week. The kiwi dollar declined to over a 1 week low down 0.96% on the day losing 0.92% over the week. The Reserve Bank of New Zealand had indicated that rates could be decreased. Australia is set to release building approvals data on Monday.

Disclaimer: This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.