The dollar is little changed in comparison to its major competitors Friday afternoon. After another eventful week, investors are attempting to decipher what course the central banks will follow in the near future. Most are now coming to the conclusion that the Federal Reserve will need to hold off on an interest rate hike until next year. Meanwhile, many believe the European Central Bank may announced further stimulus measures.
New York Fed President William Dudley said Thursday he would be in favor of a rate hike this year, but acknowledged that recent data suggests the economy is slowing.
European Central Bank Governing Council member Ewald Nowotny said new measures are required to achieve price stability as core inflation is clearly below the target.
“The ECB is using the monetary policy instruments available – but it is quite obvious that in the current macroeconomic situation additional sets of instruments are necessary,” Nowotny who also heads Austria’s central bank, said at a conference in Warsaw.
Largely reflecting a steep drop in mining output, the Federal Reserve released a report on Friday showing a modest decrease in U.S. industrial production in the month of September. The report said industrial production fell by 0.2 percent in September after edging down by a revised 0.1 percent in August.
Economists had expected production to drop by 0.3 percent compared to the 0.4 percent decrease originally reported for the previous month.
After reporting a notable deterioration in U.S consumer sentiment in the previous month, the University of Michigan released a report on Friday showing that sentiment has improved much more than anticipated in the month of October.
The University of Michigan said the preliminary reading on its consumer sentiment index for October came in at 92.1 compared to the final September reading of 87.2. Economists had expected the index to rise to 89.5.
The dollar climbed to an early high of $1.1335 against the Euro Friday, but has since retreated to around $1.1380.
Eurozone inflation turned negative as initially estimated in September, final data from Eurostat showed Friday. Consumer prices fell 0.1 percent in September from prior year, offsetting a 0.1 percent rise in August. The rate matched flash estimate published on September 30.
Eurozone’s trade surplus in August declined more-than-forecast from the previous month, as exports declined and imports increased, figures from Eurostat showed Friday. The seasonally adjusted trade surplus fell to EUR 19.8 billion from EUR 22.4 billion in July. Economists had expected EUR 22.1 billion surplus.
The buck rose to a high of $1.5429 against the pound sterling, but has since eased back to around $1.5455.
The greenback reached a high of Y119.659 against the Japanese Yen Friday, but has since pulled back to around Y119.335.