By Joseph Adinolfi, MarketWatch
NEW YORK (MarketWatch) -- The dollar rose against most rival
G-10 currencies Friday, after economic data from Europe and Japan
showed a widening growth differential between those economies and
the U.S.
"The dollar is the only game in town being supported by
strengthening economic data," said Michael Woolfolk, global markets
strategist at BNY Mellon.
Data had an outsize impact on currency markets Friday, as
growing tensions in Ukraine, which tend to rattle markets, appear
to have already been priced into foreign-exchange and bond markets.
That was evidenced by the historic weakness of the 10-year German
bund yield, the preferred safe haven asset in the euro zone region,
which reached a historic low Thursday, Woolfolk said.
The ICE U.S. Dollar Index (DXY), a measure of the dollar's
strength against six rival currencies, was at 82.5260 Friday
morning, compared to 82.4770 Thursday evening.
A gauge of U.S. consumer sentiment released Friday morning rose
in August, reversing a drop in July.
The dollar (USDJPY) rose slightly to 103.86 yen from Yen103.68
Friday after inflation data showed growth below the Bank of Japan's
2% goal. The nationwide core consumer-price index signalled that
consumers remain unwilling to spend and companies continue to
grapple with tepid demand and high inventories.
Separately, industrial output in Japan increased by a paltry
0.2% in July, much lower than the 1.2% forecast. The reading came
after a sharp 3.4% drop in June. Meanwhile, retail sales rose 0.5%
in July from a year ago, the first year-on-year rise since the
country's April 1 tax increase. But economists said it was a weak
rebound.
In Europe, inflation slowed to the lowest rate in five years.
The question remains as to whether the reading was weak enough to
push the European Central Bank into launching new easing measures
at its policy-setting meeting next week, but it did drive the euro
slightly lower.
The euro (EURUSD) traded at $1.3170 Friday morning, compared to
a close of $1.3185 Thursday evening. It fell to GBP0.7942, compared
to GBP0.7947 late Thursday.
The pound (GBPUSD) rose slightly against the dollar, trading at
$1.6582, compared with $1.6592 late Thursday.
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