Investing.com – The dollar pared some of its losses against a basket of major currencies to move off session lows but remained under pressure as the US economy slowed more than expected in the final quarter of 2017.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.48% to 88.76.
Gross domestic product increased at a 2.6% annual rate in the October-December period, the Commerce Department said on Friday. That was below economists’ forecast for 3% growth.
The Commerce Department in a separate report said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.3% in December after an upwardly revised 0.2% increase in November.
Also weighing on the dollar was sharp move higher in the yen after Bank of Japan governor Kuroda said that inflation was nearing the central bank’s 2%, renewing expectations that the Bank of Japan may soon start to unwind its loose monetary policy measures.
Kuroda reiterated, however, that the Bank of Japan would continue to support economy with monetary easing but that did little to hamper the yen as USD/JPY fell 0.94% to Y108.38.
Sterling also added to dollar pressure after the UK economy unexpectedly expanded faster than expected. GBP/USD rose 0.42% to £1.4198.
EUR/USD rose 0.34% to $1.2439, adding to this week’s gains after ECB president Mario Draghi attempts failed to curb growing investor expectations that the central bank is nearing a shift toward a more hawkish stance on monetary policy.
USD/CAD fell 0.58% to C$1.2305 as the ongoing rally in the oil prices support a rise in the loonie.
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