Investing.com - The greenback traded mixed against most major currencies on Friday after soft U.S. housing sales numbers sent investors betting that the Federal Reserve will taper its monthly bond-buying program at a very gradual pace.
The Fed's $65 billion in monthly bond purchases suppresses borrowing costs to incentivize investing and hiring to spur recovery, weakening the dollar as a side effect.
In U.S. trading on Friday, EUR/USD was up 0.19% at 1.3745.
The National Association of Realtors reported earlier that U.S. existing home sales declined 5.1% to 4.62 million units last month, outpacing expectations for a 4.3% drop to 4.68 million units.
In December, existing home sales were revised to a 0.8% rise to 487 million units from an initially estimated 1% increase.
The Federal Reserve has said it will pay close attention to data when deciding the pace at which it winds down is asset purchases, and the soft numbers stoked expectations the U.S. central bank will wind down its stimulus program very gradually.
Giving the dollar some support, however, were perceptions that the disappointing numbers were the product of a string of blizzards sweeping across the country that disrupted commerce, and more robust indicators will return once skies clear.
The euro, meanwhile, continued to battle headwinds after Markit Economics reported Thursday that the euro zone composite output purchasing managers’ index ticked down to a two-month low of 52.7 this month, down from January’s 31-month high of 52.9.
Analysts were expecting a 53.1 reading, and the report softened the euro due to the continent's still high unemployment rates and soft inflationary pressures, which many think will prompt the European Central Bank to loosen policy if recovery flounders.
The dollar was up against the yen, with USD/JPY up 0.26% at 102.54, and down against the Swiss franc, with USD/CHF down 0.29% at 0.8870.
The yen came under pressure after the minutes of its January policy meeting released earlier revealed that the Bank of Japan decided to avoid any misunderstanding about its monetary easing program, the bank needed "to provide a clear explanation that it did not strictly set this to end in two years."
In April last year, the BoJ had announced a policy overhaul that aimed to double the money supply and achieve 2% inflation within about two years.
The greenback was up against the pound, with GBP/USD down 0.05% at 1.6642.
U.K. retail sales dropped 1.5% in January, according to official data, outpacing consensus forecasts for a 1% decline. Retail sales in December were revised down to a 2.5% increase from a previously estimated 2.6% gain.
On a yearly basis, U.K. retail sales rose 4.3% last month, compared to expectations for a 5% increase, after a 5.3% advance in December.
The numbers softened the pound.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.26% at 1.1128, AUD/USD down 0.39% at 0.8970 and NZD/USD down 0.26% at 0.8282.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.06% at 80.27.
On Friday, the U.S. is to round up the week with private-sector data on existing homes sales.