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Forex - Dollar remains broadly lower as U.S. data disappoints

Published 16/06/2017, 13:39
© Reuters.  Dollar still on the downside after weak U.S. housing sector data
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Investing.com - The dollar remained broadly lower against other major currencies on Friday, after the release of disappointing U.S. data overshadowed the previous session’s more positive economic reports.

The U.S. Commerce Department said housing starts decreased by 5.5% in May to hit 1.092 million units from April’s revised total of 1.156 million units. Analysts had expected a 4.1% rise to 1.215 million last month.

Meanwhile, building permits declined by 4.9% to 1.168 million units in May from 1.228 million the month before. Economists had forecast a 1.8% increase to 1.250 million units last month.

EUR/USD gained 0.30% to 1.1179, bouncing off the previous session’s two-week trough of 1.1130, after the International Monetary Fund and the euro zone's 19 finance ministers backed a payout of €8.5 billion to Greece in order to a default in July and avert another debt crisis.

However, the IMF said it will not disburse the money until the euro zone details debt relief measures, which are not expected until next year.

Investors were also eyeing the second round of the parliamentary election this Sunday, as recent opinion polls show that French President Emmanuel Macron is set to win a massive majority.

GBP/USD rose 0.24% to 1.2788, still supported by the fact that three members of the Bank of England’s Monetary Policy Committee surprised markets by voting in favor of a rate hike on Thursday.

However, the BoE chose to keep interest rates unchanged at a record low and maintain the level of its asset purchase program for the time being.

USD/JPY added 0.23% to 111.19, while USD/CHF slipped 0.13% to 0.9739.

Earlier Friday, the Bank of Japan kept its monetary policy unchanged, in a widely expected move, pledging to keep asset purchases around the current target of ¥80 trillion.

"Private consumption has increased resilience against a background of steady improvement in the employment and income situation," the BOJ said in a statement.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.46% at 0.7615 and with NZD/USD advancing 0.43% to 0.7239.

In New Zealand, data earlier showed that the Business NZ Manufacturing Index rose to 58.5 in May from 56.8 the previous month.

Meanwhile, USD/CAD fell 0.29% to trade at 1.3230.

Statistics Canada reported on Friday that foreign securities purchases increased by C$10.60 billion in April, disappointing expectations for a rise of C$12.14 billion

Foreign securities purchases rose by C$15.05 billion in March, whose figure was revised from a previously estimated gain of C$15.13 billion.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.26% at 97.25, pulling away from Thursday’s two-week highs of 97.56.

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