The dollar is down against the Euro at the end of the trading week, but is little changed against the rest of its major competitors. The buck is down slightly against the Japanese Yen and is modestly higher against the British pound.
Investors have been playing it cautious on Friday, due to continued uncertainty ahead of next week’s Federal Reserve announcement. Analysts are still split on whether the Fed will announce an increase in interest rates. While upbeat economic data points to the first rate hike in nearly a decade, the recent market volatility and concerns about developing economies may keep the Fed on hold.
Meanwhile the dollar dropped against the Euro following the release of the weaker than expected U.S. consumer sentiment report. Consumer sentiment in the U.S. has seen a substantial deterioration in early September, according to the University of Michigan’s preliminary report.
The report said the consumer sentiment index tumbled to 85.7 in September from the final August reading of 91.9. Economists had expected the index to show a much more modest decrease to 91.0.
With a drop in energy prices offset by a continued increase in service prices, the Labor Department released a report on Thursday showing that U.S. producer prices came in flat in the month of August. The Labor Department said its producer price index for final demand was unchanged in August after rising by 0.2 percent in July. Economists had expected the index to edge down by 0.1 percent.
The dollar hovered around the $1.1280 level against the Euro early Friday, but has since dropped to a 2-week low of $1.1340.
German consumer price inflation remained stable as initially estimated in August, final data from Destatis showed Friday. The consumer price index rose 0.2 percent year-on-year, the same as in July. The rate matched the preliminary estimate published on August 28. The measure climbed for a seventh month running.
Germany’s wholesale prices declined at a faster pace in August, figures from Destatis showed Friday. Wholesale prices dropped 1.1 percent year-over-year in August, following a 0.5 percent stable rate of decrease in the previous month. The wholesale price index has been falling since July 2013.
The French current account balance turned to deficit in July largely due to the decline in surplus on services, the Bank of France showed Friday. The current account deficit totaled EUR 0.4 billion in July compared to a surplus of EUR 0.8 billion in June.
The buck has bounced back from yesterday’s low of $1.5475 against the pound sterling to around $1.5425 this afternoon.
U.K. construction output decreased unexpectedly in July after recovering in the previous month, figures from the Office for National Statistics showed Friday. The volume of construction output fell a seasonally adjusted 1.0 percent month-over-month in July, reversing a 0.9 percent increase in June. Economists had expected a 0.5 percent climb for the month.
The greenback has slipped to around Y120.540 Friday afternoon, from Thursday’s week and a half high of Y121.322.
Japan’s business survey index of large manufacturers turned positive in the three months ended September, while future situation is expected to weaken, the quarterly survey by the Ministry of Finance and the Cabinet office showed Friday.
The Business Survey Index, or BSI, turned to a positive reading of 11.0 in the three-month period to September from -6.0 in the previous three months.
At the same time, the sentiment is expected to fall to 10.5 in the October to December period and predicts a 7.1 score for the first quarter next year.
The material has been provided by InstaForex Company – www.instaforex.com