Dollar Weakening Heading Into The Weekend

(RTTNews) - The dollar is losing ground in comparison to its major competitors on Friday. There has been little major news to impact investor sentiment today. However, another round of weak economic data from China dragged stock markets lower around the globe. Chinese export and import growth slowed more than expected in July. Meanwhile U.S. import prices unexpectedly decreased, while export prices climbed.

U.S. import prices unexpectedly decreased in the month of July, according to a report released by the Labor Department on Friday, although the report also showed an unexpected increase in export prices.

The Labor Department said import prices fell by 0.6 percent after tumbling by 2.4 percent in June. The continued drop surprised economists, who had expected import prices to increase by 0.2 percent.

At the same time, the report said export prices rose by 0.5 percent in July following a 1.7 percent decrease in the previous month. Economists had expected export prices to edge down by 0.1 percent.

The dollar rose to a one-week high of $1.2240 versus the Euro on Friday, but has since pulled back to around the $1.2300 level.

Germany's EU harmonized inflation came in below the preliminary estimates In July, final data released by the Federal Statistical Office showed Friday. Month-on-month, the harmonized index of consumer prices moved up 0.4 percent in July, unrevised from the flash estimates. In June, prices dropped 0.2 percent sequentially.

Industrial production in France remained unchanged in June, as factory activity continued to be subdued hurt by the euro area debt crisis and adds to the outlook that the second biggest economy may have slipped into recession in the third quarter.

Overall industrial production remained unchanged from May when it decreased 2.1 percent, which was revised from 1.9 percent, statistical office Insee said. Economists were looking for a 0.1 percent increase in June.

The buck reached a 2-session high of $1.5576 Friday morning, but has since retreated back to around $1.5675.

Output price inflation in the U.K. slowed in July to the lowest since October 2009, signaling further easing of inflationary pressures in the economy, the latest figures from the Office for National Statistics showed Friday.

Factory-gate inflation eased to 1.7 percent in July from a revised 2 percent in June. The last time the annual rate was lower was in October 2009, when the index rose 1.5 percent, according to the statistical office. Economists had forecast the rate of inflation to ease to 2 percent from June's originally estimated 2.3 percent.

Construction output in the U.K. declined 3.9 percent quarter-on-quarter in the second quarter, the latest figures from the Office for National Statistics showed Friday. The decline was smaller than the 5.2 percent fall estimated in the preliminary report on the second quarter gross domestic product.

According to the statistical office, the estimated impact on the second quarter GDP from this release of construction output data is an upwards revision of 0.1 percentage points.

The Bank of Japan on Friday said that industrial production may improve moderately going forward reflecting developments in demand at home and abroad. In the monthly report released a day after concluding two-day meeting of the Policy Board, the central bank said industrial production has been relatively weak and the pick-up in exports has moderated.

Public investment, private consumption and business fixed investment have been showing an upward trend in the recent months, the bank noted. Housing investment has also been picking up.

The greenback has fallen to a 3-day low of Y78.152 versus the Japanese Yen on Friday, after pulling back from yesterday's high of Y78.782.

Japan's industrial output increased modestly in June, in contrast to preliminary estimates for a slight decrease, final data from the Ministry of Economy, Trade and Industry showed Friday. Industrial production increased a seasonally adjusted 0.4 percent month-on-month in June, defying preliminary estimates for a 0.1 percent decline. In May, production had decreased 3.4 percent sequentially.

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