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Dollar index pares gains despite upbeat UoM report

Published 06/12/2015, 10:46 AM
© Reuters.  Dollar index holds steady even as U.S. data beats expectations
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Investing.com - The dollar remained broadly higher against a basket of other major currencies on Friday, as data showed that U.S. consumer sentiment improved more than expected this month and that U.S. producer prices rose slightly more than expected in May.

In a preliminary report, the University of Michigan said its consumer sentiment index rose to 94.6 this month from a reading of 90.7 in May, compared to expectations for an increase to 91.5.

The UoM also said that its inflation expectations for the next 12 years ticked down to 2.7% in June from 2.8% in May.

The reports came after the U.S. Department of Labor said that its producer price index rose 0.5% in May, just above expectations for a 0.4% uptick, after a 0.4% slip the previous month.

Year-on-year, producer prices declined by 1.1% last month, in line with expectations, after a 1.3% drop in April.

Core producer prices, which exclude food and energy, ticked up 0.1% in May, in line with market expectations and following a 0.2% fall in April.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.94, down from four-day highs of 95.67 hit earlier.

EUR/USD was steady at 1.1255, after falling to lows of 1.1152 earlier in the session.

The euro remained under pressure after the International Monetary Fund pulled out of Greek debt talks on Thursday as it accused Athens of failing to compromise over labour market and pension reforms.

Greek Prime Minister Alexis Tsipras was scheduled to resume talks in Brussels with European commission President Jean-Claude Juncker on Friday. However, such a meeting is now in doubt.

A government spokesman said Greece's negotiating team is "ready" to intensify efforts to wrap up a deal "even in the next 24 hours."

USD/JPY slipped 0.11% to 123.27 as market participants chose to forget comments by Bank of Japan Governor Haruhiko Kuroda on Wednesday suggesting that the relative value of the yen may not continue to fall.

Elsewhere, GBP/USD rose 0.32% to 1.5567, while USD/CHF declined 0.63% to trade at 0.9267.

The Australian and the New Zealand dollars remained weaker, with AUD/USD sliding 0.30% to 0.7732 and with NZD/USD down 0.42% to 0.6981.

Earlier Friday, data showed that New Zealand's Business Manufacturing Index ticked down to 51.5 in May from a reading of 51.8 the previous month.

USD/CAD added 0.18% to trade at 1.2313.

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