The euro fell against the dollar on Friday after a senior Federal Reserve policymaker indicated that the central bank could still raise short-term interest rates next month. The dollar was boosted after Fed Vice Chairman Stanley Fischer said it was still too early to determine whether to raise short-term interest rates from near zero, where they have been held since December 2008, at the bank’s September meeting. The dollar had weakened as fears over a slowdown in growth in China roiled global markets, with equities and commodities the hardest hit. Fears over China also prompted investors to push back expectations on the timing of an initial rate hike by the Fed.
GBP/USD
The pound was little changed against the dollar in late trading on Friday, after falling to almost two-month lows earlier in the session after comments by a senior Federal Reserve official kept the door open for a rate hike next month. The dollar found support after Fed Vice Chairman Stanley Fischer said it was still too early to determine whether to raise short-term interest rates from near zero, where they have been held since December 2008, at the bank’s September meeting. In the U.K., data on Friday confirmed that gross domestic product expanded 0.7% in the second quarter, unchanged from an initial estimate, but up from 0.4% in the three months to March.
USD/JPY
The Japanese yen held weaker ahead of a deluge of end of the month data Friday that will set the tone. In Japan, July national CPI, the unemployment rate and household spending are all due. National core CPI is seen down 0.2% year-on-year in July, while unemployment is seen steady at 3.4% and retail sales up 1.1% and household spending increased 1.3%.
