The greenback rose across the board on Friday on short-covering as investors tended to book profits in the higher yield assets ahead of the G8 meeting held in Italy in the weekend. In addition, Japanese Finance Minister Kaoru Yosano said the government’s confidence in U.S. debt is “unshakable” and will keep buying the securities. This comments eased the concerns about Asian countries, China, Japan, India and South Korea, would diversify their reserves away from the dollars.
In European afternoon session, euro declined further against the greenback after eurozone posted worse-than-expected industrial production (-1.9% in April compared to the readings of –1.4% in March) as the data highlighted the weakness in the region. The single currency tumbled to as low as 1.3935 versus the dollar in New York afternoon after the release of University of Michigan consumer sentiment survey as the data was somehow mixed. Although it rose from 69 from 68.7 in may, it fell short of economists’ forecasts of 69.5. However, the euro was able to recover some of its losses versus the U.S. currency ahead of the G8 meeting in the weekend.
Although the British pound also tumble to as low as 1.6330 against the greenback after the release of U.S. consumer survey, sterling pared some losses due to short-covering. In addtion, hawkish comments fm BOE's chief economist Spencer Dale, he said in a monetary policy conference at Norway's central bank in Oslo that BOE was thinking about future exit strategies from stimulus stance and the instruments are raising rates n selling assets.
The dollar continued to trade with a firm undertone after the supportive comments from Japanese Finance Minister Kaoru Yosano and the yen closed at session high at 98.45 versus the greenback.
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