U.S. Dollar Loses Ground Against Major Counterparts []
Friday, March 16, 2007 9:09:26 AM - The U.S. dollar lost ground to its major counterparts on Friday. The drop came amid the release of CPI data from the United States. The downward move caused the dollar to touch a multi-month low against the euro. Traders in New York will be looking ahead to the release of industrial production data and consumer sentiment later in the morning for further direction.
The American dollar slid in trading with the euro on Friday. The buck touched 1.3281, a daily high against the its European counterpart. The buck continued to slide directly after hitting the daily high and continued to do so into the mid morning. The greenback fell to 1.3339 at 7:00 am ET, a three-month low against the euro. The pair stabilized a little heading into the mid-morning, and around 9:00 am ET, traded around 1.3328.
Before a massive morning slide, the dollar saw relatively stable overnight trading against the pound, which caused the dollar to hit a daily high of 1.9370 at 2:15 am ET. The lack of movement followed an announcement on Thursday by BoE member Andrew Sentance, who warned that Britons may have to slow spending to keep inflation under control in the near term. Shortly after touching the high, however, the dollar slid to its lowest levels since the beginning of the month. The dollar hit the multi-week low of 1.9505 directly before the release of U.S. economic data. Around 9:00 am ET, the pair traded around 1.9478.
The dollar dropped in trading with the yen on Friday, moving off a three-day high it saw on Thursday. The buck touched Friday morning’s daily high of 117.21 shortly after 2:00 am ET. The buck continued to slide shortly after, and reached a two-day low of 116.51 around 7:00 am ET. The greenback climbed slightly in the mid-morning, and around 9:00 am, it traded at 116.70 against the yen. Official data from Japan released in the early morning indicated Japanese leading index revised up, while the coincident index was revised down in January.
Friday morning, the Department of Labor said that its consumer price index rose 0.4 percent in February following a 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest increase of 0.3 percent. The report also showed that the core consumer price index, which excludes food and energy prices, edged up 0.2 percent in February after rising 0.3 percent in January. The increase by the core index came in line with economist estimates.
Also released on Friday will be industrial production data, which measures the output of the industrial sector across the nation. Capacity utilization statistics will be released as well. High numbers for these data points could point to strength in the economy, though they could also indicate possible inflation pressures. Economists predict that the level of industrial production will expand for the month of February, after falling 0.5% in January.
Finally, preliminary numbers on consumer sentiment are set for release at 10:00 am ET. The data, which comes from the University of Michigan, is a key look at the average consumer’s financial conditions and attitudes on the economy. The number for March is expected to decline to 89.8 from 91.3 recorded in February.