RTTNews - There was no rest for the weary dollar on Friday, as the besieged buck tumbled to fresh multi-month lows against a basket of major currencies. Traders sifted through a pile of economic data, but nothing prompted a move back into the safety of the dollar.
While the green shoots being seen on the economic horizon may prove to be a mirage, increased risk appetite has crippled the dollar over the past few weeks.
In particular, the dollar has been hammered against resource-linked currencies like the loonie and aussie, in addition to its big losses versus the resurgent sterling. The price of oil rose above $66 a barrel to its highest level this year on Friday.
After a brief respite earlier in the week versus the euro, the dollar hit the skids on Friday, slipping to a 2009 low of 1.4167. Despite deep skepticism about the capacity of the euro area to join any global economic recovery in the second half the year, the dollar may come under further pressure if stocks continue to improve.
The dollar plunged yet again versus the scorching-hot sterling, slipping to a fresh 6-month low of 1.6198. With the loss, the dollar moved further away from January's 23-year high of 1.3501.
Meanwhile, the buck continued to tumble versus the loonie, dropping to a 7-month low of 1.0904. Versus the yen, the dollar eased to 95.47, having seen an extended period of choppy trading.
Economic activity in the first quarter contracted at a slightly slower than previously estimated pace, according to a report released by the Commerce Department on Friday, although the report also downwardly revised the pace of consumer spending growth in the quarter.
The report showed that gross domestic product fell 5.7 percent in the first quarter compared to the advance estimate of a 6.1 percent decrease. Economists had been expecting the pace of contraction to be revised to 5.5 percent.
Activity in the Chicago-area manufacturing sector continued to contract in the month of May, according to a report released by the Institute for Supply Management - Chicago on Friday, with the pace of contraction unexpectedly accelerating compared to the previous month.
The ISM-Chicago said its index of activity in the sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists had been expecting the index to edge up to a reading of 42.0.
Overseas, a preliminary estimate from the European Union statistics office indicated that Euro area consumer prices logged zero growth in May, which was the lowest since records began in 1996, raising deflationary concerns in the economy. In the UK, a survey found that UK house prices rose unexpectedly in May to record the largest increase since October 2007.
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