The dollar weakened against its peers on Friday closing out the week lower as the market delayed predictions for when the Federal Reserve will increase its key interest rate as economic data out of the US of late has put a question mark on the strength of the US economy. The dollar overlooked figures which revealed that consumer prices were up for the second month in a row last month. The consumer price index ticked up 0.2% in March following the same increase in February. Core consumer prices had the same gain in March marking its biggest annual increase since October.
The euro strengthened against the dollar with the pair trading at its 1.08 handle towards the close tallying last week’s gain of 1.89%. The euro was higher against the greenback for the 4th session in a row. As Greece still has not been able to have its proposed economic reforms approved and securing its bailout is nowhere near in sight, the market is growing fearful of the possibility that Greece will be made to exit the euro zone however the euro still managed to gain against the greenback.
The pound strengthened against a weaker dollar trading at 1 month highs on the pair’s 1.50 handle. As doubt surrounding the results of upcoming parliamentary elections weighed in the pound’s advances were curtailed. The pound was weaker against the euro. In the upcoming week the market will be looking towards the release of the Bank of England’s latest meeting minutes on Wednesday and the UK’s retail sales report due on Thursday.
The yen strengthened against the dollar closing higher for 6 consecutive sessions as the pair closed out the week down 1.06% despite a slight increase in US consumer prices. The yen was weaker against the euro which had been bolstered by a weaker dollar. Bank of Japan Governor Kuroda commented recently that his central bank policies are aimed at inflation and not the FX rate and remain committed to its 2% target for inflation while introducing stimulus measures as required.
The Australian and New Zealand dollars climbed to a 3 week high against the greenback as talk of the Fed and timing of a rate increase softened the dollar. The Aussie dollar had been supported by Australian employment data released on Thursday which beat forecasts. New Zealand is set to release consumer price inflation data on Monday.
The Canadian dollar weakened against the greenback on profit taking after having posted 4 month highs following an increase in oil prices and after the Bank of Canada presented a more favorable outlook on its economy. Canada is due to release data on wholesale sales on Tuesday.
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