RTTNews - The dollar held its ground versus other majors Friday morning in New York as traders around the world expressed caution ahead of the latest round of consumer sentiment data.
Renewed risk appetite has driven the dollar lower of late against most major counterparts this spring, but concerns the green shoots on the economic horizon may prove a mirage have allowed the world's safe haven currency to stabilize in June.
Friday's trading is likely to be influenced by the Reuters/University of Michigan's initial reading on consumer sentiment for the month of June. Economists expect the reading to climb to 69.5 compared to May's revised reading of 68.7. The report is due to be released at 9:55 a.m. ET.
Traders may also keep an eye on the Labor Department's report on import and export prices in the month of May. The report may attract attention amid concerns about inflation as the U.S. begins to recover from the recession.
The dollar spiked higher versus its petro-linked Canadian counterpart Friday morning, rising to C$1.1250 after OPEC reduced its forecast for demand for its crude. The price of of crude dropped more than a $1.25 to near $71 a barrel in early dealing.
Meanwhile, the dollar firmed up versus the euro, rising to 1.3980. With traders expressing doubts about the euro area's capacity to join the global recovery, the dollar has fallen no lower than its 5-month low of 1.4338, set June 2.
French annual inflation fell into negative territory in May for the first since 1957, driven by a large decrease in energy prices, official data showed Friday.
The consumer price index or CPI dropped 0.3% year-on-year in May after rising 0.1% in April, statistical office INSEE said.
Its been a rougher ride for the dollar against the sterling. After testing a 6-month low of 1.6662 from earlier in June, the dollar steadied near 1.6390 Friday morning.
In an interview to the Financial Times, the Chancellor of the Exchequer Alistair Darling expressed confidence over the prospects of recovery in the U.K. But he said he is also cautious. The failure of other European nations in cleaning up their banks as well as rising oil prices could adversely impact the British recovery, he said.
The dollar consolidated its recent gains versus the yen, bouncing back above 98. A week ago, the dollar hit a monthly high of 98.87, and has since hovered around that mark.
Japan's consumer confidence improved to 36.3 in May from 33.2 logged in the previous month, a monthly survey from the Cabinet Office revealed Friday. The indicator stood above the expected reading of 34.
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