RTTNews - The dollar continued its run of choppy trading Friday morning in New York, turning higher versus the euro and sterling while seeing virtually no movement against the yen.
Traders pondered news out of Italy, where the Chinese urged reserve currency system reform at the G8 meeting, threatening the dollar's safe haven status. Still, there was no mention of the greenback in a draft declaration on the international monetary system released Thursday.
German Chancellor Angela Merkel gave the buck a lift this morning, telling reporters at the G8 that China's idea of an artificial currency is not yet of practical relevance in the near future.
Of the major currencies, only the yen has been able to sustain much momentum this summer, with traders unsure about who will lead a global economic recovery. The dollar has fallen out of favor due to concerns about government spending, while the euro has floundered amid speculation the euro zone economy will be slow to snap back.
The dollar rose to 1.3900 versus the euro Friday morning, improving from yesterday's weekly low of 1.4071. A move to 1.3830 would take the dollar to its highest point since June 22.
The dollar rose to 1.6200 versus the sterling, paring some of yesterday's notable losses. Earlier in the week, the dollar rose to a monthly high of 1.5982 before faltering on Thursday.
U.K.'s output prices fell 0.2% month-on-month in June after rising 0.4% in May, the Office for National Statistics said Friday, beating expectations for a 0.3% increase.
Versus the yen, the dollar edged very slightly lower to 92.40, staying near Wednesday's 5-month low of 91.79.
Japan's corporate goods prices dropped by the steepest year-over-year pace on record in June, mainly due to a dip in petroleum and coal prices and the prices of scrap and waste products, a report by the Bank of Japan showed Friday.
The corporate goods price index dipped 6.6% year-on-year in June, after falling a revised 5.5% in the previous month, revised from a 5.4% drop.
The markets will receive the trade balance figures from the Commerce Department at 8:30 a.m. ET along with the export & import price indexes for June, which gives the changes in the prices of non-military goods and services traded between the U.S. and the rest of the world. Economists expect the trade deficit to widen to $30.0 billion in May from $29.2 billion in April.
Shortly after the opening bell on Wall Street, the Reuters/University of Michigan's preliminary reading of consumer sentiment for July is scheduled to be released. Analysts expect the index to edge down to 70.3 from the final reading of 70.8 for June.
Treasury Secretary Tim Geithner is set to testify before a joint hearing of House Financial Services and Agriculture Committees regarding derivatives regulation at 10 a.m. ET.
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