Investing.com - The dollar remained broadly weaker against the other major currencies on Friday, hovering close to 13-month lows as U.S. economic reports on growth and consumer sentiment were overshadowed by the Federal Reserve’s latest remarks and fresh U.S. political concerns.
In its advance report, the U.S. Bureau of Economic Analysis said gross domestic product rose 2.6% in the second quarter, in line with estimates and up from a 1.2% growth rate in the three months to March. First quarter GDP was revised from an previously estimated 1.4% increase.
The report also showed that the U.S. employment cost index ticked up 0.5% in the last quarter, disappointing expectations for a 0.6% rise.
Separately, the University of Michigan said its consumer sentiment index was upwardly revised to 93.4 in July from a preliminary estimate of 93.1, beating expectations for an unchanged reading.
But the dollar remained under pressure after the Fed said on Wednesday that inflation remains below its 2% target even as near-term risks to the economic outlook appear “roughly balanced.” In the past, the Fed judged that weakness in inflation was transitory.
The central bank’s cautious tone on inflation sparked fresh uncertainty over the possibility of a third rate hike this year.
Sentiment on the greenback also remained vulnerable after Senate Republicans failed to pass their Obamacare repeal bill in a dramatic vote of 49-51 late Thursday night.
In addition, the Senate approved sweeping sanctions against Russia, forcing President Trump to decide whether to accept a tougher line against Moscow or issue a veto amid investigations into ties between his presidential campaign and Russian officials.
EUR/USD climbed 0.51% to 1.1737, not far from Thursday’s two-and-a-half year highs of 1.1777.
The single currency has been largely supported in recent weeks, after European Central Bank President Mario Draghi signaled in June that the central bank could soon start tapering its stimulus program.
Elsewhere, GBP/USD rose 0.30% to 1.3104.
USD/JPY slipped 0.19% to 111.03, while USD/CHF advanced 0.44% to trade at 0.9690.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.35% at 0.7995 and with NZD/USD adding 0.11% to 0.7496.
Meanwhile, USD/CAD tumbled 0.99% to trade at 1.2431, re-approaching the previous session’s two-year trough of 1.2412.
Statistics Canada reported on Friday that the country’s GDP rose 0.6% in May, surpassing expectations for an increase of only 0.2% and up from a growth rate of 0.2% the previous month.
The commodity-related loonie also continued to benefit from the ongoing rally in oil prices, hitting fresh eight-week highs on Friday thanks to four consecutive weeks of declines in U.S. crude inventories.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.49% at 93.31, just off Thursday’s 13-month low of 93.00.