The greenback gained ground against the currencies of Europe, Switzerland and Japan on Friday morning in New York. Against the UK's sterling, the dollar was stable during the session.
Investors weighed the Commerce Department report on personal income and spending, showing that personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. Meanwhile, personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month.
At the same time, the final reading of the Reuters/University of Michigan's consumer sentiment index showed a revised reading of 57.3 in March. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.
Recouping its early morning losses, the greenback edged slightly higher against the Japanese yen in early New York trading. The buck advanced to 98.14 versus the yen by 10:20 am ET from previous session's 2-day low of 97.12. The pair, which closed yesterday's deals at 98.73, is currently hovering near the 98 level.
Focusing on economic reports from Japan, core consumer price index was unchanged in February from one year earlier, while the overall CPI was down 0.1 percent on year. The data showed overall inflation was down 0.3 percent compared to one month earlier.
Another report said that retail sales in Japan plummeted by 5.8 percent in February when compared to a year earlier. The decline was the sharpest in 7 years and the 5th straight month of lower retail sales.
Against the pound, the dollar moved mostly in a sideways pattern in the session after edging up to an 8-day high in early trading. The dollar was worth 1.4333 versus the pound by 11:25 am ET, ticking down from previous high of 1.4271 hit around 6:55 am. The cable was worth 1.4455 at Thursday's close.
The pound was mostly weaker in early morning after the Office for National Statistics report showed that the UK economy contracted 1.6% sequentially in the fourth quarter. This was down from a revised figure of minus 1.5%. Year-on-year, GDP was down 2% in the fourth quarter.
Meanwhile a separate report from the same agency showed that UK's current account deficit narrowed to GBP 7.6 billion in the fourth quarter of 2008 from a revised deficit of GBP 8.2 billion in the previous quarter. Economists had expected deficit to contract to GBP 5.9 billion.
At the same time, the Bank of England Deputy Governor for financial stability, Paul Tucker stressed the need for policy makers to be cautious while making regulatory changes in the global financial system. It might well be a mistake to reach early conclusions on the truly big issues, Tucker said at the Turner Review Conference in London.
The Bank of England chief economist Spencer Dale said today that the UK economy may recover by the end of this year. In a speech at the Association of British Insurers Economics and Research Conference in London, Dale said, as we go through 2009, I believe it is most likely that the pace at which output is contracting will ease and that we will see some signs of recovery by around the turn of this year.
Against the currencies of Europe and Switzerland, the US dollar climbed to an 8-day high of 1.1467 and 1.3266, respectively before leveling off in the late morning. This may be compared to yesterday's closing values of 1.3528 against the euro and 1.1273 versus the Swiss franc and the buck is currently trading at 1.331 and 1.1435 respectively.
Swiss think tank KOF said today that its economic barometer fell to minus 1.79 in March from February's revised minus 1.37, implying that economic activity in the country will continue to decline. Economists had expected a reading of minus 1.55 for March.
In economic news from the euro area, Euro-zone's industrial new orders dropped 3.4% month-on-month in January, after falling a revised 8% in December. Economists were looking a decline of 5.6%. Year-on-year, industrial new orders plunged 34.1% in January, compared to the 23.8% decline in the previous month. Economists had predicted a decline of 28.4%.
French statistical office INSEE said that the nation's final gross domestic product or GDP fell 1.1% quarter-on-quarter in the last three months of the previous year, compared with a 1.2% decline estimated previously.
The German federal Statistical Office said in a preliminary report that the consumer price index or CPI rose 0.5% year-over-year in March, slower than the 1% increase in the previous month. Economists were looking for an increase of 0.7%. On a monthly basis, the CPI dropped 0.1% in March, in contrast to a 0.6% rise in February. Economists expected an increase of 0.1%.
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