Dollar flat in quiet trading

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Investing.com - The dollar largely flat against most major currencies on Friday a session void of major economic indicators, as ongoing concerns Portugal's financial sector may be in trouble fueled safe-harbor demand for the greenback, though reassuring words out of Lisbon steadied the euro and halted the U.S. currency's advance.

In U.S. trading on Friday, EUR/USD was unchanged at 1.3608.

Disappointing euro zone factory data released Thursday watered down the euro earlier Friday, though the single currency did manage to take back earlier losses.

Italy's industrial output unexpectedly fell 1.2% in May from April, defying expectations for a 0.2% expansion, while French industrial production plunged 1.7% in May, also confounding expectations for a 0.2% gain.

Financial concerns also pressured the euro down against the dollar.

The parent company of Portugal's largest bank, Banco Espírito Santo, said it missed payments on commercial paper to a few clients, which spooked markets by fueling concerns surrounding the soundness of the banking sectors in Portugal as well as in Spain and Italy.

By Friday, investors crept out of safe-harbor dollar positions and returned to both European and U.S. equities after Banco Espírito Santo sought to reassure markets that it had the funds to cover its parent company, which firmed the euro and cut into the dollar's advance.

Portuguese government and central bank authorities sought to soothe global markets as well by assuring to the soundness of the country's financial system.

Meanwhile in the U.S., solid jobless claims numbers released on Thursday managed to keep the greenback in steady on Friday.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending July 5 declined by 11,000 to 304,000. Analysts had expected jobless claims to hold steady at 315,000 last week.

The dollar was flat against the yen, with USD/JPY unchanged at 101.34, and flat against the Swiss franc, with USD/CHF down 0.01% at 0.8921.

The greenback was up against the pound, with GBP/USD down 0.11% at 1.7115.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.79% at 1.0734, AUD/USD down 0.08% at 0.9386 and NZD/USD down 0.12% at 0.8812.

Official data released earlier revealed that the number of employed people in Canada declined by 9,400 in June, defying expectations for a 20,000 rise after an increase of 25,800 in May.
The report also showed that Canada's unemployment rate rose to 7.1% in June, from 7.0% the previous month. Analysts had expected the unemployment rate to remain unchanged last month.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% at 80.23.

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This article appears in: Investing , Forex and Currencies

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