Dollar Little Changed Heading Into The Weekend
13:30, 11th May 2012
(RTTNews) - The dollar is little changed Friday afternoon, despite the unexpected increase in consumer sentiment. The currency is up slightly versus its major European rivals, but has remained basically flat against the Japanese Yen. Investors continue to keep an eye on the political situation in Greece as the country attempts to put together a coalition government.
The buck has been trading in a range versus the Euro since Wednesday. The currency is slightly higher on Friday, rising to around $1.2935, from a low of $1.2978 on Thursday.
The Eurozone has entered a technical recession, but the recovery is in sight, the European Commission said in its Spring forecast. A gradual recovery is forecast to begin in the second half of the year and gather momentum in 2013. However, downside risks to the GDP forecast continue to prevail.
The economy is forecast to shrink 0.3 percent this year, in line with the February interim forecast. But it reflects a downward revision from the Autumn forecast of 0.5 percent growth. In 2013, the 17-nation bloc is expected to expand 1 percent.
The greenback is up more substantially versus the pound sterling on Friday, rising to around $1.6085, from yesterday's low of $1.6181.
U.K. factory gate inflation slowed less than expected in April, while input price growth eased at a faster-than-expected rate, data from the Office for National Statistics revealed Friday. The output price inflation slowed to a twenty-eight month low of 3.3 percent from an upwardly revised 3.7 percent in March. Previously, the rate was lower in December 2009, when the index rose 3.2 percent, the statistical office said. The inflation rate was still above economists' forecast of 2.9 percent.
The output price index for home sales of manufactured products rose 0.7 percent month-on-month, faster than the 0.6 percent gain in March. Economists had expected the rate of increase to slow to 0.4 percent.
The dollar has remained basically flat versus the Japanese Yen Friday, hovering Y79.900. The U.S. currency reached a 2-day high of Y80.011 on Thursday.
Japan's monetary aggregate M2 increased 2.6 percent in April from a year ago, the Bank of Japan said Friday. The rate of increase was weaker-than an expected 2.9 percent rise.
With energy prices showing a notable decrease in the month of April, the Labor Department released a report on Friday showing an unexpected drop in producer prices for the month. The Labor Department said its producer price index fell by 0.2 percent in April after coming in unchanged in March. Economists had expected the index to remain flat for the second straight month.
Consumer sentiment in the U.S. has unexpectedly seen a continued improvement in the month of May, according to a report released by Reuters and the University of Michigan on Friday, with their consumer sentiment index jumping to a four-year high. The report showed that the consumer sentiment index for May rose to 77.8 from the final April reading of 76.4. The increase came as a surprise to economists, who had expected the index to edge down to 76.2.
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