The dollar weakened against its peers on Friday on the back of lackluster US economic growth data while remarks from Federal Reserve Chair Yellen put pressure on the greenback. The US dollar index closed out the week down 0.66% marking its second week in a row posting losses. The Commerce Department reported that in the 4th quarter of 2014 the US economy grew at an annual rate of 2.2%. The consumer sentiment index reported by the University of Michigan dropped from a reading of 95.4 in February to 93.0 in March. Yellen announced that a rate increase could take place later this year while indicating that an increase could be held back due to lessening risk of deflation.
The euro held its ground against a softer dollar with the pair back down below its 1.09 handle closing the week up 0.6% as poor US data weighed in alongside Yellen’s comments. Greece presented fresh reforms for approval in order to secure its bailout extension. Germany and Spain will release initial data on consumer price inflation tomorrow.
The pound strengthened against a weaker dollar up 0.29% towards the end of Friday’s session. The pound was supported by remarks made by Bank of England Governor Carney who indicated that the next adjustment to its interest rate will be upward and not downward. The UK is scheduled to release figures on net lending on Monday.
The yen was virtually unchanged against the dollar with the pair down 0.74% for the week after a series of mixed economic data had been released out of Japan and favorable US jobless claims figures had less of an affect. Japan’s household spending was up 0.8% while consumer price inflation increased at an annualized rate of 2.0% and retail sales declined at an annualized rate of 1.8% in February. Japan is set to release initial data on industrial production on Monday.
The Australian dollar weakened against the greenback closing out the week down 0.28% and the New Zealand dollar to a 1 week low as the market took in the US GDP data while trying to predict when the Fed will raise rates. The Canadian dollar held its ground against the greenback. Canada is due to publish data on raw material price inflation on Monday.
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