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Dollar index erases losses but gains capped

Investing.com -

Investing.com - The dollar erased losses against the other major currencies in quiet trade on Friday, as no major U.S. economic data was to be released throughout the day but gains were expected to remain limited as declined expectations for a 2016 U.S. rate hike continued to weigh.

EUR/USD fell 0.35% to 1.1220, off session highs of 1.1285.

The single currency had strengthened after European Central Bank President Mario Draghi said on Thursday that the current monetary policy is effective and the changes to the banks growth forecast are not so substantial as to warrant a decision to act.

The comments came after the central bank left its benchmark interest rate at a record-low 0.0%, in line with market expectations.

Meanwhile, sentiment on the dollar remained vulnerable as data on Thursday showing that U.S. initial jobless claims fell to a six-week low last week failed to boost optimism over the strength of the economy.

GBP/USD slipped 0.20% to 1.3269.

The U.K. Office for National Statistics reported on Friday that the goods trade deficit narrowed to £11.76 billion in July from £12.92 billion in June, whose figure was revised from a previously estimated deficit of £12.41 billion.

Analysts had expected the trade deficit to narrow to £11.75 billion.

USD/JPY rose 0.26% to 102.74, while USD/CHF gained 0.32% to trade at 0.9758.

The Australian and New Zealand dollars pushed lower, with AUD/USD down 1.01% at 0.7566 and with NZD/USD declining 0.74% to 0.7343.

Elsewhere, USD/CAD advanced 0.81% to 1.3038, the highest since September 2.

Statistics Canada reported on Friday that the number of employed people increased by 26,200 in August, beating expectations for a 15,000 rise and after a decline of 31,200 the previous month.

However, the report also showed that Canada's unemployment rate ticked up to 7.0% last month from 6.9% in July. Analysts had expected the unemployment rate to remain unchanged in August.

The commodity currencies were also hit by declining oil prices on Friday, as investors locked in profits from the previous session's surge sparked by data showing that U.S. crude supplies fell by the most since April 1985 last week.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.39% at 95.41, off session lows of 94.81 and the highest level since September 6.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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