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Dollar hits 1-1/2 week highs ahead of U.S. economic reports

Published 09/30/2016, 05:35 AM
Updated 09/30/2016, 05:35 AM
Dollar gains ground against rivals with eyes on U.S. data

Investing.com - The dollar moved higher against the other major currencies on Friday, as investors eyed the release of U.S. economic reports due later in the day after mixed data on Thursday painted a rather mixed picture.

Investors awaited the release of U.S. personal spending and consumer sentiment data, as well as report on manufacturing activity in the Chicago area for further indications on the strength of the economy.

EUR/USD slid 0.35% to 1.1179.

Official data on Friday showed that the euro zone’s consumer price inflation rose by a 0.4% this month, in line with forecasts and following a final reading of a 0.2% advance in August.

Core CPI, which excludes food, energy, alcohol, and tobacco costs, increased by 0.8% in September, compared to expectations for a 0.9% gain and the previous month’s 0.8% increase.

The report came shortly after data showed that German retail sales fell 0.4% in August, disappointing expectations for a 0.3% slip.

USD/JPY held steady at 101.07, after hitting a one-week high of 101.86 on Thursday.

In Japan, data earlier showed that household spending dropped 3.7% in August, confounding expectations for a 1.0% decline.

Another report showed that Tokyo's core CPI, which excludes fresh food, slipped by an annualized rate of 0.5%, disappointing expectations for a 0.4% fall.

The pound slipped lower, with GBP/USD down 0.11% at 1.2953, not far from last week’s one-month low of 1.2912, while USD/CHF rose 0.35% to 0.9695.

The U.K. Office for National Statistics reported on Friday that gross domestic product rose 0.7% in the second quarter, up from a previous estimate of 0.6% and compared to expectations for 0.6%.

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However, on an annual basis, U.K. GDP increased 2.1% in the second quarter, up from a previous estimate of 1.9% but below expectations for a growth rate of 2.2%.

A separate report showed that the U.K. current account deficit widened only to £28.7 billion in the last quarter from £27.0 billion in the first quarter. Analysts had expected the deficit to widen to £30.5 billion in the second quarter.

The Australian dollar was weaker, with AUD/USD down 0.33% at 0.7610, while NZD/USD held steady at 0.7255.

Elsewhere, USD/CAD edged up 0.14% to trade at 1.3163.

Sentiment on the commodity currencies was fragile as optimism over the production freeze deal struck late Wednesday by major oil producers eased as market players turned their attention to a November meeting, where more details should be hammered out.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.28% at 95.70, the highest since September 21.

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