The dollar edged up in Asian trading on Friday, poised for weekly gains after solid US economic data contrasted with figures showing euro zone inflation cooling.
The dollar edged up in Asian trading on Friday, poised for weekly gains after solid US economic data contrasted with figures showing euro zone inflation cooling. The dollar index, which tracks the U.S. currency against a basket of six major rivals, was up 0.1 percent at 100.50, up 0.9 percent for the week and not far from a two-week high of 100.60 hit overnight. The euro nursed losses, up 0.1 percent on the day at $1.0681 but down 1.1 percent for the week. German and Spanish consumer price data released on Thursday showed inflation slowed more sharply than expected in March as oil prices slumped, offering some respite to the European Central Bank as it faces pressure to wind down its monetary stimulus.
Revised US gross domestic product data on Thursday showed that US fourth quarter growth slowed less than previously reported as consumer spending provided a boost that was partially offset by the largest gain in imports in two years. “The number itself wasn’t great but the forward-looking indicators look pretty good,” said Jennifer Vail, head of fixed-income research for US Bank Wealth Management in Portland, Oregon.
“You’re probably going to see some modest reaction to the softness we’re seeing in the eurozone, as it looks like some of the inflation data is not as strong as initially thought,” she said. “I think the reason you didn’t see more substantial dollar strength is concerns on the lack of conviction that our new president had in getting ACA repealed.”
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Republicans withdrew their bill a week ago to replace and repeal the Obama administration’s Affordable Care Act (ACA) due to lack of support in Congress, raising concerns that President Donald Trump’s tax reform and stimulus measures might also face legislative challenges.
Trump lashed out on Thursday at Republican conservatives who helped torpedo the healthcare legislation, escalating a feud within his party. Against its Japanese counterpart, the dollar was flat on the day at 111.98 yen, up 0.5 percent for the week.
Data released on Friday showed Japan’s core consumer prices rose 0.2 percent in February from a year earlier, marking the fastest annual pace in nearly two years but still distant from the central bank’s ambitious 2 percent target.
Japan’s business year ends on Friday. The dollar was on track to lose 0.6 percent against the yen for the fiscal period. Sterling edged up 0.2 percent to $1.2490, on track for a slight gain in a week marked by volatile trading in a week in which British Prime Minister Theresa May formally triggered the Brexit process.
The dollar rallied 1 percent against South Africa’s rand to 13.410, its highest since early February, after President Jacob Zuma replaced the country’s finance minister.
Zuma appointed Malusi Gigaba to replace Pravin Gordhan who was sacked in a cabinet reshuffle late on Thursday evening, eNCA television said.