Dollar Gains On Euro, Pound; Choppy Against Yen

Dollar Gains On Euro, Pound; Choppy Against Yen

Friday, February 16, 2007 9:26:48 AM - The dollar advanced on the pound and the euro during Friday morning in New York, while it saw choppy trading against the yen. The morning’s moves followed the release of U.S. monthly PPI and housing starts data.

The dollar continued to advance on the pound during Friday morning in New York. The drop was a continuation of the move that began after the release of weaker than expected British retail sales on Thursday. Later in the morning, the dollar touched 1.9474, its highest level since Wednesday. As trading entered mid-morning, the pair traded around 1.9476.

The dollar slowly climbed against the euro ahead of the release of the U.S. economic data. With the slide, the dollar continued to move off a monthly low that it touched against the euro during Thursday’s session. The greenback touched 1.3097 around 8:00 am ET, its highest level against the euro since Wednesday. By mid-morning, the pair traded at 1.3106.

The dollar saw choppy trading against the yen during Friday morning in New York. The dollar has been declining against the yen over the last few days, and dropped to a monthly low of 118.98 on the release of U.S. economic data. The drop soon corrected itself, however, and the pair returned to early morning numbers around 119.36.

The U.S. Labor Department revealed that its producer price index - a key gauge of wholesale inflation - dropped 0.6% in January. This followed a 0.9% increase in December and a jump of 1.8% in November. A 4.6% fall in energy prices was the main cause of the decline. Core PPI, which excludes the volatile food and energy sectors, rose 0.2%.

In a separate economic report, the U.S. Commerce Department revealed that housing starts - a measure of new residential construction - dropped 14.3% in January to annual rate of 1.408 million units. This followed a revised pace of 1.643 million units in December. Meanwhile, building permits - a gauge of future construction - dipped 2.8% to an annual rate of 1.568 million units.