The US currency will be vulnerable if there is a renewed surge in oil prices, but will start to offer medium-term value at current levels.

The dollar weakened to near 1.5590 in early Europe on Thursday, but then found some relief as the Euro came under pressure against Sterling. The US currency also secured some support from a reversal in oil prices, but it was again unable to break Euro support close to the 1.5460 level with further consolidation around 1.55 and a slightly weaker dollar on Friday.

The US economic data releases provided no support to the US currency. The Philadelphia Fed index weakened to -17.1 in June from -15.6 previously although there was another strong reading for the prices component. Initial jobless claims were little changed at 381,000 in the latest week while the number of continuing clams was lower than expected. There was some disappointment, but little change in interest rate futures with caution ahead of the Fed rate-setting meeting next week.

Dollar selling increased in European trading with the Euro pushing to the 1.5610 level. The US currency was unsettled in part by a renewed rally in commodity prices. The Saudi oil summit will be watched closely over the weekend and evidence of a lack of significant action to boost supply or curb demand would tend to trigger a renewed oil buying next week which would also tend to undermine the US currency.