The dollar weakened against its peers on Friday, remaining at near 6-month lows on thin volume traded after the Federal Reserve Bank of Atlanta announced that US GDP barely expanded in the first quarter. The Atlanta Fed reduced its forecast for 1st quarter growth to 0.1% from 0.4% released earlier last week. The dollar closed out the week slightly lower as investors overlooked remarks from the Japanese Prime Minister focusing on weakening the yen. The dollar has suffered losses recently as a result of market expectations the Federal Reserve will maintain a vigilant approach with regards to raising interest rates over the remainder of the year. The US dollar index was down 0.3%, trading at 94.22 towards Friday’s close.
The euro strengthened against the dollar with the pair up 0.21%, trading at 1.1402 towards Friday’s close off its session high of 1.1419 after having come off its session low of 1.1349 reached earlier in the day. The pair closed above 1.14 for the first time in nearly 6 months, closing above 1.13 for the 8th session in a row. The euro’s advances were curtailed following remarks from European Central Bank officials which reconfirmed the central bank’s preparedness to ramp up stimulus measures if required.
The pound strengthened against the dollar with the pair up 0.4%, trading at 1.4128 towards Friday’s close off its session high of 1.4141 after having come off its session low of 1.4040 reached earlier in the day. The pound overlooked data released by the UK Office for National Statistics which revealed that manufacturing output dropped 1.1% in February, compounding forecasts for a decline of 0.2%. Data also revealed that UK industrial production dropped 0.3% in February, while experts forecast an increase of 0.1%. Other data revealed that the UK trade deficit shrank from 12.16 billion pounds in January to 11.96 billion in February, while experts forecast the deficit to decrease to 10.20 billion.
The yen strengthened against the dollar with the pair down 0.11%, trading at 108.10 towards Friday’s close off its session low of 108.07 after having come off its session high of 109.09 reached earlier in the day. The yen initially weakened on the back of comments from Japan’s Prime Minister Taro Aso which highlighted a possible intervention by the Bank of Japan to weaken its currency as a result of the yen’s recent unwanted moves. The yen then rebounded once the market predicted Japanese officials will postpone any intervention until at least after the upcoming G20 meetings in the US.
The Australian, New Zealand and Canadian dollars strengthened against the greenback, as commodity associated currencies were supported by a rally in oil prices. Oil futures surged over 6% to settle at 2-week-plus highs, closing at $41.94 per barrel as the market became increasingly optimistic major producers will reach a deal to freeze output. The Aussie dollar was up 0.67% against the greenback, trading at 0.7555 towards Friday’s close off its session high of 0.7579 after having come off its session low of 0.7499 reached earlier in the day. The kiwi dollar climbed 0.46% against the greenback, with the pair trading at 0.6806 towards Friday’s close off its session high of 0.6829 after having come off its session low of 0.6770 reached earlier in the day. The loonie surged 1.29% against the dollar, with the pair trading at 1.2978 towards Friday’s close off its session low of 1.2952 after having come off its session high of 1.3155 reached earlier in the day. The loonie had climbed to 1-week highs against the dollar following the release of Canadian jobs data which was better than forecast.
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