Investing.com - The dollar erased gains against other major currencies on Friday, despite positive U.S. consumer sentiment data, as a downbeat report on U.S. fourth quarter growth dampened optimism over the outlook for the economy.
EUR/USD rose 0.25% to 1.0707, off session lows of 1.0657.
The University of Michigan said its consumer sentiment index rose to 98.5 in January, up from a preliminary reading of 98.1 and compared to expectations for 98.1.
The report came after the U.S. Bureau of Economic Analysis said gross domestic product grew 1.9% in the fourth quarter of 2016, disappointing expectations for 2.2% and after a 3.5% growth rate in the three months to September.
Separately, the Census Bureau said U.S. durable goods orders fell 0.4% in December, compared to expectations for a 2.6% gain.
Core durable goods orders, which exclude transportation items increased by 0.5% last month, in line with expectations.
Sentiment on the greenback has remained vulnerable since Donald Trump’s inauguration last Friday amid concerns over a lack of clarity on his economic policies and fears that his protectionist trade stance could hit corporate profits and act as a drag on growth.
Elsewhere, GBP/USD slipped 0.24% to trade at 1.2569, off Thursday’s six-week high of 1.2680.
Investors remained cautious as U.K. Prime Minister Theresa May was set to meet with Donald Trump on Friday.
The two leaders were expected to discuss the possibility of a trade deal between their countries.
USD/JPY climbed 0.45% to 115.04, the highest since January 20, while USD/CHF edged down 0.16% to 0.9985.
Data earlier showed that Tokyo’s consumer price index rose by an annualized rate of 0.1% in January, beating expectations for a flat reading.
Tokyo’s core CPI, which excludes fresh food, slipped 0.3% this month, compared to expectations for a 0.4% fall.
The Australian and New Zealand dollars pushed higher, with AUD/USD up 0.25% at 0.7555 and with NZD/USD gaining 0.46% to 0.7277.
Meanwhile, USD/CAD was up 0.13% at 1.3109, after hitting highs of 1.3131 earlier in the session.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.08% at 100.44, off session highs of 100.81 and not far from previous session’s seven-week low of 99.77.