The US dollar fell on Friday, retreating from an overnight rally when a revision to US growth figures failed to live up to some market expectations.
With Friday's decline, the dollar ended its third straight losing week versus the euro. The dollar now essentially sits about halfway between the all-time low to which it sunk late last year and the levels to which it had rallied early this year.
Late Friday, the euro was at US$1.3240, up from US$1.3199 late Thursday. The dollar slipped to ¥105.17 from ¥105.42, and to 1.1627 Swiss francs from SF1.1692. The pound rose to US$1.9181 from US$1.9104. The euro was also near a fresh eight-week high versus the yen, trading at ¥139.30 from ¥139.13.
Recently, the dollar has been engaged in a two-way trade, boosted by strength in US economic data and Federal Reserve interest rate hikes, but pressured by the ongoing concern over the size of the US current account deficit.
Though the fourth-quarter GDP figure was revised up sharply to 3.8 percent from an earlier reading of 3.1 percent, it failed to impress some in the market who had been looking for an even stronger figure that could have helped to make a case for faster Fed rate hikes.
Nevertheless, the GDP data did little to change the outlook for the Fed. Indeed, the rate on the 10-year Treasury is slightly lower on the session at 4.27 percent from 4.29 percent late Thursday.
Despite the activity surrounding the GDP report on Friday, the data ultimately provided a short-term trading opportunity in a market that is still maintaining a bearish medium-term outlook, analysts said.
Tim Mazanec, senior currency strategist at Investors Bank & Trust in Boston, said, "It's really just a short-term squeeze play. The euro has pretty key support at US$1.3150 in most people's eyes. When the dollar couldn't break through that level before GDP and [when], after GDP, there was not much of a [positive] reaction, there was a squeeze there" that pushed the euro back up.
Mazanec said US$1.3150 to US$1.3270 was "a fairly decent size range for a couple of days until we get some [economic] numbers."
The pound also came under pressure after the UK's fourth-quarter GDP revision failed to live up to expectations. The market had expected growth to be estimated at 0.8 percent, instead it was left at 0.7 percent as previously reported.
The yen was additionally helped overnight by a strong rally in Japanese stocks, which brought the NIKKEI average up about 1 percent, despite more negative news on the inflation front.
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