RTTNews - The dollar continued its path toward parity with Canada's loonie and was unable to sustain its gains from the previous evening versus the euro Friday morning in New York.
Its been another rough week for the dollar, as rising stocks and renewed hopes that the economy is on the mend has led traders to seek riskier higher-yielding assets. The safe haven dollar strengthened during the throes of the economic crisis, but has since tailed off due to risk appetite and concerns about government spending.
On economic front Friday, traders will focus on the Reuters/University of Michigan's final report on the consumer sentiment index for July scheduled to be released at 9:55 AM ET. Economists forecast a decline in the index to 65 from June's 70.8, but slightly higher than the mid-month reading of 64.6.
Evidence that the Canadian economy is in much better shape than once feared has crippled the dollar against the loonie of late. Friday morning, the dollar dropped to a new 7-week low of C$1.0830. A move below C$1.0782 seems inevitable, and would take the dollar to its lowest level since October 2008.
The dollar eased versus the euro, slipping to 1.4245. In the process, the dollar moved back toward yesterday's 7-week low of 1.4290.
German business climate showed a better-than-expected improvement in July, indicating that the biggest Eurozone economy is on the road to recovery, results of a closely watched survey suggested Friday.
The Munich-based Ifo Institute for Economic Research said its business climate indicator for Germany rose to 87.3 in July from 85.9 in June. That was the fourth consecutive month of increase and topped expectations for a reading of 86.5.
Versus the sterling, the dollar was steady near 1.6450, not far from yesterday's multi-week low of 1.6585. On a longer-term basis, the pair is little changed from June 1.
Friday, preliminary data revealed that the UK economy shrunk at a slower pace in the second quarter, though the contraction was severe than economists expected.
The Office for National Statistics reported that the gross domestic product declined 0.8% quarter-on-quarter in the second quarter, after falling 2.4% in the first three months of the year. Economists were looking for a 0.3% contraction.
The dollar saw little movement versus the yen, clinging to most of yesterday's gains. The pair moved at 94.85 approaching 8 am ET.
Prominent companies to report earnings today include Black & Decker Corp. (BDK), Fortune Brands (FO), Ingersoll-Rand Co. (IR) and Schlumberger (SLB).
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