RTTNews - The dollar was stable versus most majors Friday morning, but slipped to a fresh multi-week low versus the yen amid speculation that the Bank of Japan will upgrade its economic forecast to reflect growing optimism about a global recovery.
Traders were gearing up for a busy morning on the economic front, headlined by the release of another round of inflation and manufacturing data.
The Labor Department will release its report on consumer price inflation in the month of April at 8:30 am ET. Economists expect consumer prices to come in unchanged after edging down 0.1 percent in March.
Trading could also be impacted by the release of reports on industrial production, consumer sentiment, and regional manufacturing activity.
The dollar remained under pressure versus the yen Friday morning, slipping to a 7-week low of 94.77. With the retreat, the dollar extended a significant week-long downtrend, edging closer to a 13-year low of 87.08, set back in January.
Reports out of Japan indicated that nation's central bank may say later this month that the economy is stagnating, but no longer deteriorating sharply.
The buck was able to stabilize versus the euro amid the release of data showing the Euro zone recession deepened in the first quarter. The dollar held near 1.3550 after slipping to a 7-week low of 1.3721 earlier in the week.
Friday, the flash estimates published by Eurostat, the Statistical Office of the European Communities said the euro area GDP declined 2.5% sequentially in the first quarter of 2009 compared to a 1.6% decline in the fourth quarter. Economists were looking for a 2% fall in the first quarter.
The dollar also found its footing against the sterling on Friday, staying near 1.5200 after hitting a 4-month low of 1.5352 earlier this week. The buck has been on the defensive versus higher-yielding counterparts like the sterling and euro as risk appetite drove trading, sparked by hopes that the global economy may have bottomed.
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