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Dollar Stays Weak For 2nd Straight Day

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Dollar Stays Weak For 2nd Straight Day

The U.S. dollar continued to exhibit weakness against most of its peers on Friday, weighed down by some weak economic data released on Thursday and on U.S. Treasury Secretary Janet Yellen’s comments about the need for additional economic stimulus.

Yellen, who urged lawmakers to approve President Joe Biden’s $1.9 trillion relief package, said the proposal could help the U.S. get back to full employment within a year. She added that recent signs of improvement in the U.S. economy are no reason to scale back the relief plan.

She also dismissed Republican complaints about the size of the proposed bill, arguing, “The price of doing too little is much higher than the price of doing something big.”

Data released on Thursday showed an increase in jobless claims and a bigger than expected jump in import prices.

In economic release on Friday, a report released by the National Association of Realtors showed existing home sales rose by 0.6% to an annual rate of 6.69 million in January after climbing by 0.9% to a revised rate of 6.65 million in December. Compared to the same month a year ago, existing home sales in January were up by 23.7%.

Economists had expected existing home sales to tumble by 2.2% to a rate of 6.61 million in December from the 6.76 million originally reported for the previous month.

The dollar index, which eased to 90.18 in the European session, recovered some lost ground but was still well below the flat line a little while ago, quoting at 90.37, down 0.24% from previous close.

Against the Euro, the dollar weakened to $1.2146 before recovering to $1.2115, but was still trailing previous close by 0.17%. The flash reading of the IHS Markit eurozone composite purchasing managers index rose to a two-month high of 48.1 in February from 47.8 in January.

The Pound Sterling was stronger, fetching $1.4007 a unit, after settling at $1.3975 on Thursday. The UK private sector output contracted only marginally in February reflecting a near-stabilization in services activity amid continuing recovery in manufacturing, a closely watched survey showed.

The Yen firmed up to 105.44 a dollar, gaining from 105.68.

The dollar was weak against the Aussie. With the AUD-USD pair at 0.7870, the dollar is down by about 1.3%. Retail turnover in Australia increased 0.6% month-on-month in January, after a 4.1% decline in December. Economists had forecast a 4.2% fall.

Against Swiss franc, the dollar was slightly stronger, fetching CHF 0.8967 a unit. Switzerland’s industrial production declined 3.8% year-on-year in the fourth quarter of 2020, data from the Federal Statistical Office showed.

The Loonie strengthened against the dollar, firming up to C$1.2620 from C$1.2679. Data from Statistics Canada showed retail sales in the country decreased 3.4% in December over the previous month. In November, retail sales had surged 1.3%. Sales were expected to drop by 2.5% in December.

The material has been provided by InstaForex Company – www.instaforex.com