Dollar broadly lower vs. rivals, focus on Fed

Published 08/31/2012, 05:15 AM
Updated 08/31/2012, 05:16 AM
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Investing.com - The U.S. dollar was broadly lower against its major counterparts on Friday, as investors were eyeing upcoming comments by Federal Reserve Chairman Ben Bernanke for indications on the bank's future policy decisions.

During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.37% to 1.2552.

The euro rose to a fresh session high after preliminary data showed that consumer price inflation in the euro zone rose more than expected in August, ticking up to an anannualized rate of 2.6% from 2.4% the previous month and beating expectations for a rise to 2.5%.

A separate report showed that the unemployment rate in the euro zone remained unchanged at 11.3% in July, in line with expectations.

Sentiment on the euro also remained supported amid expectations that the European Central Bank is working on measures to help stabilize the euro zone's sovereign debt markets, ahead of its next policy meeting on September 6.

But investors remained cautious ahead of Bernanke’s speech at a symposium in Jackson Hole, Wyoming, amid ongoing speculation over how close the Fed may be to implementing more economic stimulus.

The greenback was lower against the pound, with GBP/USD adding 0.22% to 1.5819.

Industry data showed earlier that house prices in the U.K. rose by 1.3% in August, beating expectations for a 0.1% rise and following a 0.8% decline the previous month.

Separately, a report showed that the U.K. Gfk index of consumer confidence remained unexpectedly unchanged at minus 29 in August, disappointing expectations for an improvement to minus 27.

Elsewhere, the greenback was lower against the yen and the Swiss france, with USD/JPY falling 0.15% to hit 78.51, and USD/CHF retreating 0.35% to trade at 0.9569.

Government data showed earlier that industrial production in Japan declined unexpectedly in July, dropping by 1.2% after a 0.4% rise the previous month and compared to expectations for a 1.7% increase.

Separate reports showed that Japan's index of manufacturing activity ticked down to 47.7 in August from a reading of 47.9 the previous month, while Japan's core consumer prices, which exclude fresh food, fell for a third consecutive month in August by 0.3%.

In addition, the greenback was lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.11% to 0.9915, AUD/USD advancing 0.29% to 1.0318 and NZD/USD rising 0.26% to hit 0.8007.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.31%, to trade at 81.47.

Later in the day, the U.S. was to release a report on Chicago’s purchasing managers’ index, as well as revised data by the University of Michigan on consumer sentiment and official data on factory orders.


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