The dollar is currently gaining ground against its major European competitors on Friday, but is declining against the Japanese Yen. The risk appetite of investors is down at the end of the trading week, following the release of some weaker than expected economic data from the United States.
Producer prices in the U.S. fell by more than expected in the month of March, according to a report released by the Labor Department on Friday, with the drop in prices largely due to a sharp decrease in energy prices.
The Labor Department said its producer price index fell by 0.6 percent in March after rising by 0.7 percent in February. Economists had expected the index to edge down by 0.2 percent.
After reporting a notable increase in U.S. retail sales in the previous month, the Commerce Department released a report on Friday showing that retail sales unexpectedly decreased in the month of March.
The Commerce Department said retail sales fell by 0.4 percent in March after surging up by a revised 1.0 percent in February. Economists had expected retail sales to come in unchanged compared to the 1.1 percent increase originally reported for the previous month.
Consumer sentiment in the U.S. unexpectedly showed a significant deterioration in the month of April, according to a report released by Reuters and the University of Michigan on Friday. The report showed that the preliminary reading on the consumer sentiment index for April came in at 72.3 compared to the final March reading of 78.6.
Economists had expected the index to come in roughly unchanged compared to the final March reading, which was upwardly revised sharply from its mid-month reading of 71.8.
Business inventories in the U.S. increased by less than expected in the month of February, according to a report released by the Commerce Department on Friday, although the report also showed a sharp increase in business sales.
The report showed that business inventories inched up by 0.1 percent in February following a revised 0.9 percent increase in January. Economists had expected inventories to increase by 0.4 percent compared to the 1.0 percent growth originally reported for the previous month.
A two-day meeting of European Union finance ministers begins in Dublin today. Officials will finalize the bailout package for Cyprus and consider extending debt repayment dates for Portugal and Ireland. Media reports indicated that Cyprus might ask for additional funds of as much as 10 billion euros. However, the Finance Ministry of Cyprus later denied those rumors.
The dollar climbed to a high of $1.3036 against the Euro on Friday, but has since pulled back to around $1.3090.
Eurozone’s industrial production increased at a faster-than-expected pace in February supported by a marked gain in energy production, signaling that the currency bloc is recovering gradually from the ongoing recession.
Industrial production rose 0.4 percent sequentially, reversing the previous month’s revised 0.6 percent decrease, Eurostat said. Economists had forecast output to grow 0.2 percent, following January’s originally reported 0.4 percent decrease.
Germany’s wholesale prices for March rose at the slowest pace since late 2009, data released by the Federal Statistical Office showed Friday. The wholesale price index rose 0.3 percent year-on-year, following a 1.4 percent increase in February. Economists had expected prices to remain flat. The latest increase in prices was the slowest since December 2009, the agency said.
France’s current account deficit narrowed slightly during February from the previous month, data from the Bank of France showed Friday. The seasonally-and-working-day adjusted current account deficit fell to EUR 4.947 billion from January’s EUR 5.020 billion. A year ago, the current account gap was EUR 5.072 billion.
The buck reached an early low of $1.5409 against the pound sterling Friday, but has since risen to around the $1.5350 level.
A leading indicator of the British economy increased for the second straight month in February, signaling the potential for a modest recovery in the economy later this year, s survey by the Conference Board showed Friday.
The leading economic index increased 0.4 percent month-on-month to 102.4 in February after gaining 0.2 percent in January, which followed a 0.2 percent contraction in the preceding month. Four of the seven components made positive contributions to the index this month.
Construction output in the United Kingdom decreased for the fourteenth successive month in February, but at a slower rate than in the previous month, preliminary data released by the Office for National Statistics showed Friday.
The total volume of production in the construction sector, on an unadjusted basis, declined 7 percent on an annual basis in February, slower than the 5.5 percent decrease seen in January. The sector recorded contraction for the fourteenth month in a row.
The greenback pulled back from yesterday’s high of Y99.936 against the Japanese Yen on Friday, to around Y98.970.
An index measuring tertiary industry was up a seasonally adjusted 1.1 percent on month in February, the Ministry of Economy, Trade and Industry said on Friday, standing at 99.9. That topped forecasts for an increase of 0.7 percent following the 1.1 percent contraction in January.