Investing.com - The dollar fell to fresh two-week lows against the other major currencies on Friday, after the Bank of Japan disappointed market expectations earlier in the session and the Federal Reserve’s inaction on Wednesday, while investors eyed the release of U.S. economic growth data.
USD/JPY tumbled 1.59% to trade at a three-week low of 103.57.
At the conclusion of its monthly policy meeting on Friday, the BoJ announced a modest increase in purchases of exchange-traded funds (ETFs), but maintained its base money target at 80 trillion yen as well as the pace of purchases for other assets.
The central bank also kept negative interest rates unchanged at -0.1%.
The move disappointed expectations for a stimulus package of nearly 28 trillion yen promised by Prime Minister Shinzo Abe earlier in the week to boost the economy.
The policy statement came after the Fed left interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday, in a widely expected move.
In its statement, the Fed said that “near-term risks to the economic outlook have diminished” and that the labor market has “strengthened”.
Market participants were now eyeing the release of second quarter U.S. economic growth data, due later Friday for further indications on the strength of the economy.
EUR/USD rose 0.22% to 1.1101.
In a preliminary report, Eurostat said on Friday that the euro zone’s consumer price index rose at an annualized rate of 0.2% in July, exceeding expectations for a 0.1% uptick and after a 0.1% gain the previous month.
Core CPI, which excludes food, energy, alcohol and tobacco, increased by 0.9% last month, year-on-year, in line with expectations.
The pound held steady, with GBP/USD at 1.3171, while USD/CHF dropped 0.40% to 0.9768.
Also Friday, the Bank of England reported that net lending to individuals rose to £5.2 billion in June from £4.5 billion in May, whose figure was upwardly revised from a previously estimated £4.3 billion.
Analysts had expected net lending to individuals to rise to hit £4.2 billion last month.
But the pound’s gains were capped as investors turned to the BoE’s policy meeting next week amid growing expectations for a rate cut.
The Australian dollar was steady, with AUD/USD at 0.7504, while NZD/USD rose 0.34% to 0.7094.
Elsewhere, USD/CAD edged up 0.17% to 1.3179.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.37% at 96.33, the lowest level since July 15.