The dollar weakened against its peers on Friday following the release of data which revealed that US GDP shrunk in the first quarter although recent economic data has highlighted recovery supporting predictions for a Fed rate increase at some point this year.  US GDP decreased at an annual rate of 0.7% beating expectations for a 1% decrease.  

The euro strengthened against the dollar with the pair up around 0.4% trading around 1.0988 towards the close of the session although was down 1.89% on the month.  The euro was being weighed down by Greece’s ongoing debt saga where a final agreement still has not been reached with its creditors.  Greece requires the release of bailout funds to avoid a loan default to the International Monetary Fund on June 5.  

The pound weakened against the dollar closing out the week lower for the 6th session in a row as the possibility of Britain exiting the European Union and weak economic data added pressure.  Law was enacted on Thursday by UK Prime Minister David Cameron’s government so that a referendum on EU membership will be held by the end of 2017.  Data released out of the UK revealed that consumer sentiment dropped suddenly in May.  

The yen weakened against the dollar with the pair closing out the week trading at near 12 year highs around 124.15.  The pair closed the week up 2.13% gaining 3.32% for the month.  Varied data out of Japan and dollar demand boosted the pair.  Japanese industrial production grew by 1.0% in April beating forecasts for a 0.8% increase following a 0.8% decline in March.  Household spending in Japan declined 5.5% in April following a 2.4% increase in March while experts forecast a 0.7% drop.  Japanese consumer prices gained 0.6% at an annualized rate matching forecasts.        

The Australian dollar weakened against the greenback to finish the week near a 7 week low.  The New Zealand dollar weakened against the greenback to its lowest level in nearly 5 years following the release of data which revealed that business confidence was lower than forecast, fueling chances that the Reserve Bank of New Zealand will lower its key interest rate.   The Canadian dollar weakened against the greenback with the loonie revisiting its 6 week low as dollar demand grew and after data showed Canada’s GDP shrank 0.2% in the first quarter compounding forecasts for a 0.2% increase.  

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