The US dollar fell against a basket of currencies on Friday on weaker-than-forecast data on housing and consumer sentiment in the US, while the yen weakened after the Bank of Japan (BOJ) kept interest rates steady and signaled it was in no hurry to tighten policy.
The greenback has hovered near its lowest since November last year as a batch of disappointing economic readings, together with the lack of progress on fiscal stimulus from Washington, have overshadowed the outlook on more rate hikes from the US Federal Reserve.
Earlier on Friday, the US government said the nation’s home construction fell for a third consecutive month last month to its lowest in eight months, while the University of Michigan said its gauge on consumer sentiment deteriorated early this month.
“It raises some doubt on US growth for the rest of the year,” said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.
The US dollar index on Friday slipped 0.3 percent to 97.126, down 0.15 on the week.
In Taipei, the New Taiwan dollar fell NT$0.134 against the US dollar to close at NT$30.381, down 0.9 percent from last week’s NT$30.108.
Friday’s dour US data helped erase the greenback’s initial gains against the yen, which had slid to a two-week low versus the US dollar.
The yen weakened with the BOJ nowhere close to the Fed’s path to normalize monetary policy as domestic inflation has remained sluggish.
BOJ Governor Haruhiko Kuroda said there was “some distance” to achieving the bank’s inflation target of 2 percent and it was “inappropriate” to say how the bank would exit its massive stimulus program.
That ran contrary to market speculation in the past month the BOJ could be considering its own plan for eventually withdrawing emergency stimulus for the world’s third-largest economy.
The yen was about 0.5 percent lower to ￥111.41 per US dollar in London before rebounding to ￥110.80 in later New York trading, Reuters data showed.
“The theme continues to be the potential for further yen weakness because they [the BOJ] are still grappling with the deflationary mindset of the Japanese consumer,” said Martin Arnold, foreign-exchange strategist at ETF Securities in London.
The euro was up 0.4 percent at US$1.1191 on Friday, little changed from last week’s US$1.1196.
Sterling inched up against the US dollar on Friday, ending the week just a touch higher than where it began as political and economic worries counterbalanced the surprise of three Bank of England policymakers voting in favor of a rate hike.
On Friday the pound edged up 0.2 percent to US$1.2780, up 0.5 percent for the week.
Additional reporting by CNA
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