The dollar weakened against its peers on Friday on the back of discouraging US economic data, however the greenback managed to close out the week higher. The dollar was pressured to the downside following data which revealed that US industrial production dropped beyond forecasts for March and that consumer sentiment posted slight declines in April. The US consumer sentiment index registered down from 91.0 in March to 89.7 in April, while analysts expected a reading of 92.0. US industrial output dropped 0.6% in March, compounding expectations for a decrease of 0.1%. Data suggested that the Federal Reserve will maintain its vigilant approach with regards to interest rate hikes going forward. The US dollar index was down 0.27%, trading at 94.68 towards Friday’s close, however was still up with gains of 0.46% on the week.
The euro strengthened against the dollar with the pair up 0.17%, trading at 1.1283 towards Friday’s close off its session high of 1.1317 after having come off its session low of 1.1245 reached earlier in the day. The pair closed out the week with losses of 1.06%. On Thursday the pair continued to reverse the euro’s gains, moving closer to its recent lows. The euro looks to be pressured to the downside as the eurozone consumer price index appears below expectations, weakening the currency. The European Central Bank’s monetary policy meeting is scheduled for this Thursday, and private sector activity data is set to be released out of the eurozone on Friday.
The pound strengthened against the dollar with the pair up 0.37%, trading at 1.4204 off its session high of 1.4241 after having come off its session low of 1.4132 reached earlier in the day. The pound had struggled against a host of currencies on Thursday as the Bank of England repeated its warnings that uncertainty ahead of the upcoming EU referendum will likely continue, creating downwards pressure on GDP growth. The central bank has indicated that “Brexit” will result in lower demand for UK goods and the economy will take a while to rebound.
The yen strengthened against the dollar with the pair down 0.6%, trading at 108.77 towards Friday’s close off its session low of 108.60 after having come off its session high of 109.73 reached earlier in the day. The yen, however, was down 0.44% against the dollar on the week. Japanese officials have been faced with firm warnings not to intervene to devalue the yen amid growing pressure on the Bank of Japan to offset its currency’s impact by easing monetary policy when it meets at the end of April.
The Australian, New Zealand and Canadian dollars strengthened against the greenback as commodity associated currencies were supported by data which revealed that China’s economy expanded at a rate of 6.7% in the 1st quarter, matching market expectations, following a growth rate of 6.8% in the 4th quarter of last year. The data diminished worry over lagging economic growth of the world’s 2nd largest economy, boosting the market’s appetite for risk.
The Aussie was up 0.42% against the dollar, with the pair trading at 0.7723 towards Friday’s close off its session high of 0.7734 after having come off its session low of 0.7680 reached earlier in the day. The Aussie surged over 2% on the week, trading at 10-month highs following the release of solid employment data which suggested lessening probability of the Reserve Bank of Australia lowering its key interest rate. The kiwi dollar rallied 1.04% against the greenback, with the pair trading at 0.6916 towards Friday’s close off its session high of 0.6927 after having come off its session low of 0.6839 reached earlier in the day. The pair closed out the week with gains of 1.5%. The loonie gained 0.22% against the dollar, with the pair trading at 1.2816 towards Friday’s close off its session high of 1.2902 after having come off its session low of 1.2796 reached earlier in the day. Data revealed that manufacturing sales for Canada declined 3.3% in February, compounding forecasts for a decrease of 1.5% following a rise of 2.3% in January.
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