Investing.com - The U.S. dollar was broadly lower against its major counterparts on Friday, as news of progress in tackling the euro zone's debt crisis supported demand for riskier assets, while investors eyed the release of U.S. economic data later in the day.
During European afternoon trade, the dollar was sharply lower against the euro, with EUR/USD jumping 1.10% to hit 1.2581.
Sentiment on the euro strengthened broadly after euro zone leaders agreed earlier that the region's rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc's future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country's budget deficit.
In addition, EU officials approved a EUR120 billion plan to promote growth in the single currency bloc that includes a capital boost for the European Investment Bank.
Earlier Friday, preliminary data showed that consumer price inflation in the euro zone held steady at a 16-month low of 2.4% in June, in line with expectations.
The report came after official data showed that German retail sales fell unexpectedly in May, ticking down 0.3% after a 0.2% decline the previous month. Analysts had expected retail sales to rise 0.1% in May.
The greenback was also lower against the pound, with GBP/USD climbing 0.57% to hit 1.5607.
The Bank of England's semi-annual financial stability report showed earlier that the outlook for financial stability in the U.K. has deteriorated. The central bank said the crisis in the euro zone has exposed severe vulnerabilities in the European banking system, affecting the U.K. economy.
Meanwhile, BoE Governor Mervyn King added that the U.K.'s banking system requires "real change in culture" following a series of scandals that recently rocked the industry.
Elsewhere, the greenback was higher against the yen but lower against the Swiss franc, with USD/JPY easing up 0.06% to hit 79.50 and USD/CHF shedding 0.95% to hit 0.9559.
The yen came under pressure earlier after preliminary data showed that industrial production in Japan fell more-than-expected in May, tumbling 3.1% after a 0.2% decline the previous month.
A separate report showed that Japan's index of manufacturing activity shrank in June for the first time in seven months to a seasonally adjusted 49.9 in June from a reading of 50.7 the previous month.
In addition, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD dropping 0.97% to hit 1.0234, AUD/USD surging 1.35% to hit 1.0180 and NZD/USD rallying 1.25% to hit 0.7981.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.84%, to trade at 82.19.
Later in the day, the U.S. was to publish official data on consumer price inflation and personal spending, followed by a report on the purchasing managers’ index in Chicago and revised data from the University of Michigan on consumer sentiment.
Meanwhile, EU leaders are to hold a second day of talks in Brussels.
During European afternoon trade, the dollar was sharply lower against the euro, with EUR/USD jumping 1.10% to hit 1.2581.
Sentiment on the euro strengthened broadly after euro zone leaders agreed earlier that the region's rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc's future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country's budget deficit.
In addition, EU officials approved a EUR120 billion plan to promote growth in the single currency bloc that includes a capital boost for the European Investment Bank.
Earlier Friday, preliminary data showed that consumer price inflation in the euro zone held steady at a 16-month low of 2.4% in June, in line with expectations.
The report came after official data showed that German retail sales fell unexpectedly in May, ticking down 0.3% after a 0.2% decline the previous month. Analysts had expected retail sales to rise 0.1% in May.
The greenback was also lower against the pound, with GBP/USD climbing 0.57% to hit 1.5607.
The Bank of England's semi-annual financial stability report showed earlier that the outlook for financial stability in the U.K. has deteriorated. The central bank said the crisis in the euro zone has exposed severe vulnerabilities in the European banking system, affecting the U.K. economy.
Meanwhile, BoE Governor Mervyn King added that the U.K.'s banking system requires "real change in culture" following a series of scandals that recently rocked the industry.
Elsewhere, the greenback was higher against the yen but lower against the Swiss franc, with USD/JPY easing up 0.06% to hit 79.50 and USD/CHF shedding 0.95% to hit 0.9559.
The yen came under pressure earlier after preliminary data showed that industrial production in Japan fell more-than-expected in May, tumbling 3.1% after a 0.2% decline the previous month.
A separate report showed that Japan's index of manufacturing activity shrank in June for the first time in seven months to a seasonally adjusted 49.9 in June from a reading of 50.7 the previous month.
In addition, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD dropping 0.97% to hit 1.0234, AUD/USD surging 1.35% to hit 1.0180 and NZD/USD rallying 1.25% to hit 0.7981.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.84%, to trade at 82.19.
Later in the day, the U.S. was to publish official data on consumer price inflation and personal spending, followed by a report on the purchasing managers’ index in Chicago and revised data from the University of Michigan on consumer sentiment.
Meanwhile, EU leaders are to hold a second day of talks in Brussels.