Investing.com - The dollar regained ground against the other major currencies on Friday, shrugging off the previous session’s weak U.S. data as the Bank of Japan surprised markets by announcing a negative interest rate policy and traders eyed an upcoming report on U.S. fourth-quarter growth.
USD/JPY rallied 1.70% to 120.82.
At the conclusion of its monetary policy meeting on Friday, the BOJ said it was adopting a negative interest rate of minus 0.1% and added that it will cut interest rates further into negative territory if necessary.
Meanwhile, investors awaited the release of revised U.S. fourth quarter growth data due later in the day, after the Federal Reserve gave no indications on the pace of future interest rate hikes in its policy statement on Wednesday.
The Fed left interest rates on hold at the conclusion of its two-day policy meeting, after raising interest rates for the first time in nearly a decade in December.
Separately, the dollar had weakened after data on Thursday showed that U.S. pending home sales rose less-than-expected last month, while durable goods orders dropped far more than anticipated in December.
EUR/USD slid 0.24% to trade at 1.0913.
Preliminary data on Friday showed that the annual rate of inflation in the euro zone rose by 0.4% this month, in line with expectations and after an uptick of 0.2% in December.
The European Central Bank targets annual inflation of close to, but just below 2%.
Core CPI, which excludes out food and energy costs, increased by 1.0% in January, exceeding forecasts for a 0.9% rise and after a 0.9% gain.
Earlier Friday, data showed that German retail sales fell 0.2% in December, compared to expectations for a 0.5% gain and after a revised 0.4% increase the previous month.
A separate report showed that Spain’s gross domestic product grew 0.8% in the fourth quarter, matching forecasts.
Elsewhere, the dollar was higher against the pound and thw Swiss franc, with GBP/USD down 0.14% at 1.4339 and with USD/CHF climbing 0.44% to 1.0181.
The commodity-related Canadian dollar was still supported as oil prices remained around $33 a barrel on Tuesday, after falling to 12-year lows below $27 a barrel last week. USD/CAD edged up 0.12% to 1.4047, still close to Thursday’s three-week low of 1.3946.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.08% at 0.7090 and with NZD/USD rising 0.27% to trade at 0.6497.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.43% at 99.05, off the previous session’s two-week trough of 98.45.