Dollar Weakens On Weak U.S. Data
The U.S. dollar weakened on Friday, as tame inflation data pointed to more interest rate cuts by the Federal Reserve by the end of the year.
At 4:20 a.m. ET (08:20 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 100.545, though it was still on track for a slight weekly gain thanks to its sharp rise on Monday.
Dollar dips on weak data
The gains earlier in the week were driven by a U.S.-China trade truce, which boosted the dollar on hopes that a potentially damaging trade war had been averted.
However, further gains have been harder to come by as recent data has pointed to a slowing economy, something the Federal Reserve will likely have to address in due course.
U.S. data released on Thursday showed weak retail sales and producer prices unexpectedly fell in April. The PPI figures came after weak consumer price readings earlier in the week, bolstering speculation that the Fed is likely to cut interest rates at least twice this year.
On Friday’s data front, housebuilding is expected to have risen in April, while import prices should have eased on lower oil prices, ahead of the University of Michigan’s sentiment survey.
“This week’s price action suggests fading momentum for the dollar to recoup the lingering risk premium,” analysts at ING said in a note. “Risks remain skewed to the downside for the DXY [dollar index] as strategic dollar selling remains prevalent, and the 100.0 support could be retested sooner or later.”
Source: Investing.com
