The dollar is down slightly against all of its major competitors at the end of the trading week. Fourth quarter GDP came in weaker than anticipated this morning. The result came in unrevised, while economists were expecting an upward revision. However, consumer sentiment came in better than expected.
Trading has been a bit subdued Friday, as investors await a speech from Federal Reserve Chair Janet Yellen later this afternoon. Yellen will be giving a speech on monetary policy at the San Francisco Fed conference.
Economic activity in the U.S. grew at an unrevised rate in the fourth quarter of 2014, according to the final estimate released by the Commerce Department on Friday. The report said gross domestic product increased by 2.2 percent in the fourth quarter, unchanged from the growth estimated last month.
Economists had been expecting the pace of GDP growth to be upwardly revised to 2.4 percent, which would still reflect a notable slowdown from the 5.0 percent growth seen in the third quarter.
Consumer sentiment in the U.S. deteriorated by less than previously estimated in the month of March, according to a report released by the University of Michigan on Friday. The report showed that the final reading on the consumer sentiment index for March came in at 93.0 compared to the mid-month reading of 91.2.
The final reading came in above economist estimates for 92.1 but was still below the final February reading of 95.4.
Bundesbank President Jens Weidmann said on Friday that a European solution may be required for the regulatory treatment of sovereign debt, if the ongoing discussions by the Basel Committee fail to produce an agreement.
“In contrast to other jurisdictions, the Eurosystem is for good reasons forbidden to act as lender of last resort for governments,” Weidmann said at a conference in Frankfurt. “The risk profile of euro-area sovereign debt is therefore different.”
Pointing to the need to end the preferential treatment of sovereign debt, Weidmann said sovereign debt is not risk-free and must be backed by capital. Further, he said the “exposure to a single sovereign must be capped, just as is the case for any private debtor.”
The dollar rose to a 4-session high of $1.0801 against the Euro early Friday, but has since pulled back to around $1.09.
Germany’s import prices declined at a slower-than-expected pace in February, figures from Destatis showed Friday. The import price index fell 3.0 percent year-over-year in February, below economists’ expectations for a 3.9 percent decrease.
At the same time, export price index climbed at a faster pace of 0.7 percent annually in February, following a 0.4 percent rise in the prior month. It was the sixth successive monthly increase.
French consumer confidence improved as expected to the highest level since 2010, survey data from the statistical office Insee showed Friday. The households’ consumer confidence index came in at 93 in March versus 92 in February. This was the highest score since November 2010 and came in line with expectations.
The likelihood of a broad and protracted deflation, afflicting wages and prices, is pretty low, Bank of England Deputy Governor Ben Broadbent said Friday.
“There is a risk that falling prices will beget yet weaker or even negative wage growth – that today’s “good” deflation will metastasise into something a good deal worse,” Broadbent said at Imperial College Business School, London.
Broadbent said headline inflation will get a sizeable kick upwards, once the falls in food and energy prices drop out of the annual comparison.
The buck climbed to a 1-week high of $1.4796 against the pound sterling Friday morning, but has since retreated to around $1.4875.
U.K. house price growth softened for the seventh consecutive month to an 18-month low in March, the Nationwide Building Society reported Friday.
House prices advanced 5.1 percent year-on-year in March, slower than February’s 5.7 percent increase and a 5.3 percent rise forecast by economists. This was the slowest rate of growth since September 2013.
However, house prices rose 0.1 percent on a monthly basis offsetting a 0.1 percent drop seen in February. Economists had forecast a steeper 0.2 percent rise for March.
The greenback slipped to a low of Y118.926 against the Japanese Yen Friday, from an early high of Y119.940. The U.S. currency is currently trading around Y119.125.
Overall consumer prices in Japan gained 2.2 percent on year in February, the Ministry of Communications and Internal Affairs said on Friday, which was below forecasts for 2.3 percent and down from 2.4 percent in January.
Core CPI, which excludes the volatile prices of food, added an annual 2.0 percent. That was also shy of expectations for 2.1 percent and down from 2.2 percent in the previous month.
The material has been provided by InstaForex Company – www.instaforex.com