The US dollar was broadly lower on Friday as a combination of uninspiring US economic data and political uncertainty kept traders biased toward the euro and other world currencies.
The euro and other major currencies rose against the US dollar after the release of US second-quarter GDP estimates that largely met economists’ expectations.
Some analysts pointed to a smaller-than-expected increase in US labor costs, but others suggested the data was just an excuse for traders to continue the weak US dollar trade that has sent the greenback lower for much of this year.
US GDP growth picked up to 2.6 percent in the second quarter, matching expectations of economists polled by Reuters, while growth in the first quarter was revised down to 1.2 percent.
“It doesn’t do much to add to the debate about the outlook for [monetary] policy going forward,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc. “So what we’re left with is an environment where momentum is clearly working against the US dollar and clearly working for the euro.”
The Bloomberg US dollar index on Friday fell 0.3 amid month-end selling pressure and posted a weekly decline of a similar magnitude.
In Taipei, the New Taiwan dollar fell against the US dollar, losing NT$0.050 to close at NT$30.302. The NT dollar rose 0.5 percent against the greenback from last week’s NT$30.451.
The euro has risen nearly 3 percent against the US dollar so far this month and more than 11.5 percent this year.
It posted its third straight weekly gain and the fourth in five weeks.
On Friday, the euro moved higher against the US dollar, and rose 0.65 percent to US$1.1751.
The common currency on Thursday rose to its highest against the greenback in two-and-a-half-year years before retreating in later trading.
The weakness of the US dollar has been most evident against the euro this year, but it has fallen against most other currencies as expectations for US fiscal stimulus and an increased pace of interest rate increases from the US Federal Reserve have dissipated.
The lack of surprising economic data allowed traders “to focus on the failed healthcare bill overnight, which further undermines expectations for implementation of the administration’s economic policies,” Esiner said. “And that’s ultimately a dollar-negative story.”
The Japanese yen gained 0.4 percent to ￥111.79 per US dollar, the strongest in almost six weeks.
Additional reporting by CNA and Bloomberg
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