The dollar wobbled on Friday, unable to build upon recent gains against the struggling euro as concerns about the U.S. economy offset Greece’s sovereign debt woes.
An eventful week in the currency markets ended with no resolution to the Greek crisis.
The sudden fall of IMF head Dominique Strauss-Kahn overshadowed a growing disagreement between European politicians and the the European Central Bank about how to best to approach the Greek problem.
Responding to voters resentful of Greece’s lack of fiscal discipline, German and French leaders have reportedly opened the door to a “soft restructuring of Greek debt.
The ECB, on the other hand, has warned Athens that it will stop accepting Greek bonds as collateral if Greece restructures.
Meanwhile, a series of disappointing economic figures raised doubts that the U.S. economy is picking up steam after a dreadful first quarter.
Manufacturing has tailed off, housing remains depressed, and the Fed is facing inflationary pressures leading some policy members to call for hiking ultra-accommodative interest rates.
The dollar was slightly higher against the euro today, improving to $1.4138 before settling near $1.42. The buck began the week at $1.4050, its highest since late March.
Early gains against Canada’s loonie evaporated, leaving the dollar about three cents below par.
Canadian consumer prices rose at a slower than expected pace in April compared to the previous month, official data showed Friday.
Overall consumer prices rose 3.3 percent in the twelve months to April, matching the increase recorded in March.
The buck was stuck near Y81.60 versus the yen, with little attention paid to the latest interest rate announcement from the Bank of Japan.
The Japanese central bank on Friday retained its near zero interest rate and refrained from introducing more monetary easing measures.
In economic news from Europe, German producer price inflation accelerated in April, after slowing in the previous month, data released by the Federal Statistical Office showed Friday.
The producer price index (PPI) for industrial products rose 6.4 percent year-on-year, following a 6.2 percent gain in the previous month.