Investing.com - The dollar rose against most of its peers in
Asian trading on Friday after Federal Reserve officials said
stimulus programs may begin winding down this year.
Stimulus measures, such as the Fed's monthly USD85 billion
bond-buying program, weaken the greenback by flooding the economy
full of liquidity to keep interest rates low and encourage
investing and hiring.
Weak indicators released in the U.S. earlier had markets betting
that such policies will stay in place possibly into next year to
keep the economy going before it can stand on its own.
In Asian trading on Friday, EUR/USD was down 0.10% at 1.2870.
The dollar gained steam after Federal Reserve Bank of San Francisco
President John Williams suggested that despite disappointing
economic indicators in the U.S., monetary authorities may begin to
scale back stimulus policies later this year.
Philadelphia Fed President Charles Plosser, a known inflation hawk,
added separately that the Fed should even consider scaling back the
programs next month.
Such comments gave the dollar a boost after weak economic
indicators softened the greenback prior.
The Federal Reserve Bank of Philadelphia reported earlier that its
manufacturing index fell to -5.2 in May from 1.3 in April.
Analysts were expecting the index to improve to a reading of 2.4 in
The Department of Labor said earlier Thursday that the number of
individuals filing for initial unemployment assistance in the U.S.
rose by 32,000 to 360,000 last week, well above expectations for an
increase of 2,000 to 330,000.
Soft inflation data took the steam out of the dollar before
Williams and Plosser spoke and bolstered the greenback.
The country's consumer price index fell 0.4% in April from March,
worse than expectations for a 0.2% decline, down for the second
Year-on-year inflation rates in the U.S. came to 1.1%, just shy of
market expectations for a 1.3% reading and well below the Federal
Reserve's 2% target.
Meanwhile in the housing sector, the Commerce Department said the
number of building permits issued in the U.S. rose 14.3% to 1.017
million units in April, well above expectations for a 6.2% increase
to 945,000 units.
U.S. housing starts fell by 16.5% last month to 853,000 units,
outpacing expectations for a decline of 4.9% to 973,000.
Thursday's data came in wake of soft industrial output and
producer-price reports released on Wednesday.
The greenback, meanwhile, was up against the pound, with GBP/USD
trading down 0.11% at 1.5252.
The dollar was up against the yen, with USD/JPY up 0.07% at 102.33,
and up against the Swiss franc, with USD/CHF trading up 0.14% at
In Japan earlier, the Economic and Social Research Institute said
that Japan's core machinery orders rose 14.2% in March, the largest
monthly pickup in eight years.
Analysts had expected Japan's core machinery orders to rise 2.8% in
March, and the surprise curbed the yen's losses against the dollar.
The dollar was up against its cousins in Canada, Australia and New
Zealand, mainly on fears cheaper commodities will cut into growth,
with USD/CAD up 0.16% at 1.0208, AUD/USD down 0.40% at 0.9768 and
NZD/USD trading down 0.62% at 0.8104.
The dollar index, which tracks the performance of the greenback
versus a basket of six other major currencies, was up 0.10% at
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