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Forex - Dollar moves lower after U.S. personal spending disappoints

Published 03/31/2017, 08:41 AM
Updated 03/31/2017, 08:41 AM
Dollar loses ground after U.S. data, but downside limited

Investing.com - The dollar moved lower against other major currencies on Friday, after the release of disappointing U.S. personal spending data, although overall optimism over the strength of the economy still lent support.

EUR/USD was steady at 1.0685, off the previous session’s two-week low of 1.0669.

The U.S. Commerce Department said personal spending rose 0.1% in February, compared to expectations for a gain of 0.2% and after a 0.2% rise in January.

Personal income, meanwhile, rose by 0.4% in January, in line with expectations and after rising 0.3% a month earlier.

In the euro zone, Eurostat earlier reported that the consumer price index rose 1.5% in March, below expectations for an increase of 1.8% and following a final reading of a 2.0% advance in the prior month.

Core CPI, which excludes food, energy, alcohol, and tobacco costs, increased by 0.7% in March compared to expectations for a 0.8% rise.

The report came a day after data showed that German annual inflation slowed to 1.6% this month from 2.2% in February, which was the highest rate since August 2012.

Elsewhere, GBP/USD edged up 0.11% to 1.2482. The U.K. Office for National Statistics earlier said its final reading of fourth quarter gross domestic product was an increase of 0.7%, in line with expectations and a previous estimate.

Year-on-hear however, GDP rose 1.9% in the fourth quarter, below expectations and a previous estimate for a growth rate of 2.0%.

A separate report showed that the U.K. current account deficit narrowed to £12.1 billion in the fourth quarter of 2016 from £25.7 billion in the third quarter, whose figure was revised from a previous estimate of 25.5 billion.

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Analysts had expected the current account deficit to narrow to just £16.0 billion in the last quarter.

USD/JPY was almost unchanged at 111.88, while USD/CHF held steady at 1.0006.

Earlier Friday, data showed that Japan’s household spending dropped by an annualized rate of 3.8% last month, compared to expectations for a 1.7% fall.

A separate report showed that Japan’s CPI rose 0.2% in February, year-on-year, in line with expectations and up from a 0.1% gain the previous month.

The Australian dollar was steady, with AUD/USD at 0.7642, while NZD/USD slipped 0.13% to 0.6984.

Meanwhile, USD/CAD declined 0.31% to 1.3302 after Statistics Canada said the country’s GDP rose 0.6% in January, beating expectations for an increase of 0.3% and up from a growth rate of 0.3% in December.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.11% at 100.34, just off a two-and-a-half week high of 100.47 hit overnight.

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