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Dollar steady to lower amid renewed caution, eyes on U.S. data

Published 07/27/2012, 06:45 AM
Updated 07/27/2012, 06:46 AM
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Investing.com - The U.S. dollar was steady to lower against the other major currencies on Friday, as caution over the European Central Bank's ability to tackle the euro zone's debt crisis limited risk taking, while investors awaited the release of U.S. second quarter economic growth data later in the day.

During European early afternoon trade, the dollar edged higher against the euro, with EUR/USD down 0.07% to 1.2276.

The euro rose to a session high earlier, after ECB President Draghi said on Thursday that the bank will do whatever is necessary to preserve the single currency.

In a speech in London, Draghi appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the 'transmission' of monetary policy.

But investors remained cautious amid fresh doubts about whether the ECB will take bold measures to tackle the sovereign debt crisis.

Also Friday, official data showed that Spain's unemployment rate rose slightly less-than-expected in the second quarter, ticking up to 24.6% from 24.4% in the previous quarter. Analysts had expected Spain's unemployment rate to rise to 24.9% in the second quarter.

The greenback was lower against the pound, with GBP/USD rising 0.22% to 1.5722.

Elsewhere, the greenback was steady against the yen and the Swiss franc, with USD/JPY easing 0.05% to 78.15 and USD/CHF dropping inching up 0.06% to 0.9784.

Earlier in the day, the KOF Economic Research Agency said that its economic barometer rose to 1.43 in July from 1.15 the previous month, beating expectations for a reading at 1.25.

In Japan, government data showed that retail sales rose less-than-expected in June, ticking up 0.2% after a 3.6% increase the previous month. Analysts had expected retail sales to rise 1.2% in June.

The report came after official data showed that Tokyo's core consumer price inflation, which excludes fresh food, fell 0.6% in July, in line with expectations and after a 0.6% decline the previous month.

The greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.15% to 1.0083, AUD/USD rising 0.32% to trade at 1.0428 and NZD/USD advancing 0.32% to 0.8045.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% to trade at 82.88.

Later in the day, the U.S. was to publish advanced data on second quarter economic growth followed by a report by the University of Michigan on consumer sentiment.


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