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Dollar takes a hit from weak figures
FROM GREEN TO BLUE:
The greenback's recent appreciation against other major currencies was checked on Friday by unexpectedly weak data
AFP, LONDON
Sunday, Apr 18, 2004, Page 10
The dollar suffered a setback against other leading currencies on Friday triggered by unexpectedly weak US economic figures, after a sustained period of strength during the past two weeks.
The single European currency stood at US$1.2038 from US$1.1980 late on Thursday in New York.
The dollar traded at ¥107.70 from ¥108.08 on Thursday.
The euro, which earlier this week sank to a near five-month low of US$1.1869, climbed back above the psychologically important US$1.20 mark, while sterling clambered above US$1.80 briefly after slumping to next year's low of US$1.7764 on Thursday.
Soft US industrial output and consumer confidence data from and the lack of any hawkish comment from Federal Reserve Chairman Alan Greenspan pushed the dollar lower.
"There was a shakeout after the University of Michigan numbers," said 4CAST analyst Paul Bednarczyk.
The widely-watched consumer sentiment index from the University of Michigan for April unexpectedly fell to 93.2 points -- its weakest since December -- while earlier US industrial production fell for the first time in 10 months in April.
The weak US numbers stuck out against some upbeat figures published recently, causing the the dollar to slip amid the thin pre-weekend trade, Bednarczyk added.
But despite Friday's developments, markets are still looking at an August US rate hike, given the overall strength of recent data, among them the all important labor market report, trade and retail sales numbers.
The market still expects a US rate hike in August, with the two Federal Reserve meetings before then unlikely to bring any change.
Markets had also been wary of remarks from Greenspan on Friday but nothing of great importance materialized.
But the Fed chairman is set to appear before the Joint Economic Committee next Wednesday in what is being touted as the week's key event.
"This speech may set the tone for interest rates for the next few months," said John Butler, HSBC economist.
Elsewhere, sterling found some support from a sharp rise in data for average British earnings and continued falls in jobless levels, as the case strengthened for a Bank of England rate hike in May.
The euro was changing hands at US$1.2083 from US$1.1980 late on Thursday in New York, ¥129.67 (¥129.47), £0.6679 (£0.6682) and 1.5519 Swiss francs (Sf1.5518).
The dollar stood at ¥107.70 (¥108.08) and 1.2892 Swiss francs (Sf1.2952).
The pound was at US$1.8022 (US$1.7920), ¥194.19 (¥193.82) and 2.3232 Swiss francs (Sf2.3214).
On the London Bullion Market, the price of an ounce of gold stood at US$400.85 against US$398.25 late on Thursday.
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