USDJPY United States Dollar vs Japanese Yen

The U.S. dollar continued to be lower against its key counterparts in European deals on Friday, as the U.S. economy expanded less than estimates in the second quarter.

The initial estimate released by the Commerce Department showed that gross domestic product climbed by 1.2 percent in the second quarter following a downwardly revised 0.8 percent increase in the first quarter.

Economists had expected GDP to jump by 2.6 percent compared to the 1.1 percent growth that had been reported for the previous quarter.

Slowing growth could be a concern to Federal Reserve officials who had acknowledged "diminishing near-term downside risks" in the Fed statement and plan to raise rates this year.

Traders now await the University of Michigan's final consumer sentiment index for July, which is expected to be revised upward to 90.6 from the preliminary reading of 89.5.

The greenback has been falling in the Asian session, extending its post-FOMC losses, as the Fed statement appeared to reduce a possible interest rate increase occurring in September.

Thursday, the dollar shed 0.2 percent against the euro, 0.5 percent against the franc and 0.10 percent against the pound as the Fed gave little clues about a near-term rate hike.

The greenback declined to a 2-week low of 1.1139 against the euro, compared to 1.1075 hit late New York Thursday. The greenback is seen finding support around the 1.125 zone.

Flash estimate from Eurostat showed that Eurozone consumer prices increased for the second straight month in July.

Consumer prices climbed 0.2 percent year-on-year, following a 0.1 percent rise in June. Prices were expected to rise again by 0.1 percent.

The greenback depreciated to 0.9721 against the Swiss franc, its lowest since July 5. This marks a 0.9 percent decline from Thursday's closing value of 0.9809. On the downside, 0.96 is likely seen as the next support level for the greenback-franc pair.

Survey results by the think tank KOF showed that its economic barometer unexpectedly rose for a second straight month in July to its highest level in four months, signaling sustained favorable prospects.

The KOF Economic Barometer rose to 102.7 from 102.6 in June, which was revised from 102.4. Economists were looking for a lower score of 101.4.

The greenback fell back to 102.88 against the Japanese yen, hovering near its Asian session's 2-week decline of 102.71. This may be compared to a 2-day high of 105.61 hit at 11:30 pm ET. Continuation of the greenback's downtrend may see it challenging support around the 100.00 mark.

The Bank of Japan raised the target for exchange-traded fund purchases, while holding its interest rate.

The bank will increase the purchases of exchange-traded funds so that their outstanding amount will rise at an annual pace of about JPY 6 trillion.

The greenback was trading lower at 1.3219 against the pound, off its early high of 1.3148. If the greenback continues decline, it may test support around the 1.33 region.

Data from the Bank of England showed that U.K. mortgage approvals declined to a one-year low in June.

The number of mortgages approved in June fell to 64,766 in June from 66,722 in May. This was the lowest since May 2015, when approvals totaled 64,174. It was forecast to drop to 65,500 in June.

The greenback slipped to a 2-day low of 0.7563 against the aussie and a 2-week low of 0.7173 against the kiwi, reversing from its previous highs of 0.7493 and 0.7068, respectively. Extension of the greenback's downtrend may see it challenging support around 0.765 against the aussie and 0.73 against the kiwi.

Retreating from a high of 1.3186 hit at 4:00 am ET, the greenback edged down to 1.3120 against the loonie. The greenback is poised to test support around the 1.30 mark.

Looking ahead, Chicago manufacturing survey results and University of Michigan's final consumer sentiment for July are to be released shortly.

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