The dollar is turning in a mixed performance against its major competitors Friday, but is little changed overall. The U.S. currency is up modestly against the Euro, but is slightly weaker against both the Japanese Yen and the pound sterling.
Partly reflecting another notable increase in energy prices, the Labor Department released a report on Friday showing that U.S. consumer prices rose in line with economist estimates in the month of June. The Labor Department said its consumer price index climbed by 0.3 percent in June following a 0.4 percent increase in May. The continued increase in prices matched economist estimates.
U.S. inflation remains too low to raise interest rates, a member of the Federal Reserve said Friday.
“Inflation is too low, we need to get it back up to 2 percent,” Vice Chair Stanley Fischer said in a Q and A at the US Chamber of Commerce. “That’s why we’re keeping interest rates low, to encourage investment” and growth, he said.
In another upbeat sign for the housing market, the Commerce Department released a report on Friday showing significant increases in both housing starts and building permits in the month of June. The report said housing starts jumped 9.8 percent to an annual rate of 1.174 million in June from the revised May estimate of 1.069 million.
Economists had expected housing starts to climb to a rate of 1.125 million from the 1.036 million originally reported for the previous month.
Building permits, an indicator of future housing demand, surged up 7.4 percent to an annual rate of 1.343 million in June from the revised May rate of 1.125 million. Economists had expected building permits to rise to an annual rate of 1.178 million from the 1.275 million originally reported for the previous month.
After reporting a substantial improvement in U.S. consumer sentiment in the previous month, the University of Michigan released a report on Friday showing that consumer sentiment pulled back in the month of July. The report said the preliminary reading on the consumer sentiment index for July came in at 93.3, down from the final June reading of 96.1. Economists had expected the index to edge down to 96.0.
German lawmakers on Friday gave their approval to open talks for a new bailout for Greece, a crucial backing for the controversial proposal that averted an imminent exit of Greece from the euro area. The EU also announced that everything was in place to begin negotiations for a fresh loan for the country.
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The European Stability Mechanism Board of Governors also approved a decision to grant, in principle, stability support to Greece in the form of a loan program, following approvals from national parliaments.
In a press conference, European Commission Vice President Valdis Dombrovskis said that the 7.16 billion euro bridge-loan approved on Thursday will reach Greece by Monday. He also suggested that the new bailout program for the country would be ready by August.
The dollar slipped to an early low of $1.0906 against the Euro Friday, but has since climbed to a month and a half high of $1.0850.
Eurozone construction output increased in May after falling in the previous month, figures from Eurostat showed Friday. Construction output climbed 0.3 percent month-over-month in May, reversing a 0.2 percent decrease in April, which was revised from a 0.3 percent hike reported earlier.
Bank of England Governor Mark Carney said that the interest rate hike decision will become clearer around the turn of the year.
“The decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year,” he said in a speech in Lincoln Cathedral late Thursday.
He observed that the path is much more important than the precise timing of the first rate increase. Shocks to the economy could easily adjust the timing and magnitude of rate increases.
The buck fell to an early low of $1.5672 against the pound sterling Friday, but has since bounced back to around $1.5615.
The leading economic index in the UK, which measures the future economic activity, decreased in May, the results of a survey by the Conference Board showed Thursday. The Conference Board leading economic index fell 0.4 percent in May, following a 0.3 percent climb in April.
The greenback has pulled back to around Y124.060 against the Japanese Yen Friday afternoon, from yesterday’s 3-week high of Y124.225.