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Currencies AUD Dollar Downtrend Continues As Mixed Data Weighs and Other Top Forex News.

The U.S. dollar continued to fall against the other major currencies on Friday, after the release of mixed economic reports weighed on demand for the greenback.

This mornings data started well when Chicago’s purchasing managers index’ came in at a four month-high of 59.8 in February, up from a reading of 59.6 the previous month, and confounding expectations for a fall to 57.0.

And there was more positive data when the University of Michigan released its consumer sentiment index which climbed to 81.6 for February, up from 81.3 in January. Analysts had expected the index to edge up to 81.3 in February.

But this mornings pending home sales data came in under target, rising just 0.1% in January, well below expectations for a 1.8% increase. On a brighter note, pending home sales for December were revised to a 5.8% drop from a previously estimated 8.7% decline.

And finally, U.S. gross domestic product came in under par for the fourth quarter, rising by 2.4%, slightly below expectations for a 2.5% expansion, after a 3.2% increase in the three months to September.

After the somewhat mixed data the dollar extended losses against the euro, which was already trading strongly after preliminary data showed that consumer price inflation in the euro zone remained unchanged at an annualized rate of 0.8% in February, compared for expectations for a downtick to 0.7%.

While a separate report showed that the unemployment rate in the bloc remained unchanged at 12% in January, in line with expectations.

The positive data eased speculation that the European Central Bank could cut interest rates at its policy meeting next week.

EUR/USD ended the session up 0.78% at 1.3817.

There was some more good news out of the U.K. when the Nationwide Building Society announced that U.K. house price inflation rose 0.6% in February, in line with expectations. January’s figures were also revised up to a 0.8% increase from a previously estimated 0.7% rise.

The news boosted the pound which extended gains after the release of somewhat mixed U.S. data. GBP/USD ended the session up 0.43% to 1.6760.

Elsewhere, the dollar held steady against the yen after preliminary data showed that industrial production in Japan rose 4% in January, more than the expected 3% increase, after a 0.9% gain the previous month.

A separate report showed that retail sales in Japan rose 4.4% last month compared to a year earlier, after a 2.6% increase in December. Analysts had expected retail sales to rise 3.8% in January.

Data also showed that household spending in Japan rose at an annualized rate of 1.1% last month, beating expectations for a 0.2% uptick, after a 0.7% rise in December.

USD/JPY ended the session down 0.11% at 102.02.

And the greenback floundered against the New Zealand dollar after official data showed that the ANZ business confidence index for New Zealand rose to a nearly 20-year high of 70.8 in February, from a reading of 64.1 the previous month.

NZD/USD ended the session up 0.30% at 0.8394.

While, the Australian dollar fell in sympathy with the Chinese yuan, which posted its biggest one-day fall against the U.S. dollar in nine years.

AUD/USD ended the session down 0.39% to 0.8931.

Finally the Canadian dollar ended the week in positive territory against the greenback, after official data showed that fourth quarter economic growth came in at an annualized pace of 2.9%. That was better than the 2.5% rise that was expected. But gross domestic product contracted by 0.5 per cent in December, more than the 0.3 per cent drop that economists expected.

USD/CAD closed the session down 0.61% to 1.1056.

More coverage of today’s session.

  • WSJ: U.S. economy expands at sharply slower pace. – The U.S. economy expanded at a slower pace than initially estimated late last year as federal spending cuts, bad weather and volatility overseas slowed momentum heading into 2014.
  • FT: Euro up after data cool ECB easing talk. – The single currency is jumping 0.7 per cent to $1.3798 and the FTSE Eurofirst 300 is dipping 0.1 per cent after eurozone inflation in February was higher than analysts’ forecasts, damping expectations for further easing by the European Central Bank.

More Top Stories:

Dean Popplewell: Week In FX Europe – EUR shorts snuffed after CPI. – Coming into this week, a percentage of the market was perhaps expecting Draghi and company to be a tad more proactive next week and get back into that “easing” cycle of theirs. However, with today’s euro inflation numbers and stellar German retail sales data a new strategy may need to be implemented.

The Australian: Australian dollar sold off as traders dump yuan. – There was selling in the Australian dollar late today after the Chinese yuan posted its biggest one-day fall against the US unit in nine years.

New Zealand Times: NZ dollar heads for 1.3 per cent weekly gain. – The New Zealand dollar is heading for a 1.3 percent weekly gain after a string of upbeat local data heightened investors’ anticipation for future interest rate hikes.

CTV News: Canadian dollar rises, greenback weakens. – The Canadian dollar was higher Friday morning amid data showing the economy slowed more than expected in December but 2013 growth still turned out to be respectable.

WSJ: Gold futures slip as stocks rally. – Gold prices edged lower on Friday as gains in U.S. equities eclipsed the supportive influence of a weaker dollar.