The dollar fell for a third week in four against the euro after traders said they were less optimistic about prospects for US economic growth.
The US currency dropped 1.2 percent this week as reports showed higher jobless benefit claims and the biggest contraction in New York state manufacturing since October 2001. The dollar trimmed losses yesterday when a report showed Philadelphia area manufacturing didn't contract as much as economists had expected.
"People remain pessimistic about the US economy, and that's hurting the dollar," said Shohgo Nagaya, foreign exchange manager at Nomura Trust and Banking Co. The currency may fall to Japanese Yen 119 in the next week, he said.
The dollar traded at US$1.0880 per euro at 5pm in New York, unchanged from late yesterday. The currency was also at Japanese Yen 119.77, from Japanese Yen 119.65, and had its first losing week in three against its Japanese counterpart, having declined 0.7 percent.
Stock markets in the US were closed Friday.
The Fed earlier this week said March factory output fell 0.5 percent, compared with a median expectation of a 0.2 percent drop from economists in a Bloomberg News survey. A report from the New York Fed showed the state's factory index for April fell to minus 20.4 from minus 2.8 in March, the biggest drop since the aftermath of the Sept. 11 attacks.
Trading Friday was less than the daily average of US$1.2 trillion because markets in Hong Kong, Singapore, and London were closed for the Passover and Good Friday holidays, Nagaya said.
The dollar's decline this week was limited as US stocks rose, boosting demand for the currency.
The Standard & Poor's 500 Index rose 2.9 percent, the Dow Jones Industrial Average gained 1.6 percent and the NASDAQ Composite Index climbed 4.9 percent during the week. The gains came as companies from Citigroup Inc and Ford Motor Co to Intel Corp and Microsoft Corp reported first-quarter profits that beat analysts' expectations. The lower dollar boosted some company earnings.
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