· The dollar fell against a basket of currencies on Friday, snapping a three-day streak of gains, after an overall strong U.S. first-quarter growth report was overshadowed by soft inflation data.
· Gross domestic product increased at a 3.2 percent annualized rate in the quarter, the Commerce Department said in its advance GDP report, released on Friday, versus the 2.0 percent estimated by economists polled by Reuters.
The dollar, however, did not enjoy a boost from the report as traders focused on the core personal expenditures consumption price index figure, the Federal Reserve’s preferred inflation gauge, which increased at only a 1.3% rate versus 1.8% in the prior quarter.
· “Overall, U.S. growth last quarter was outstanding. But the soft inflation components were enough to spur some profit-taking in the buck’s winning week,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
“Once the dust settles, the focus should shift back to the bullish U.S. growth theme which has been resoundingly positive for the dollar,” said Manimbo.
· The dollar index, which measures the greenback against six other major currencies, was 0.2% lower at 98.009. The index, which hit a 23-month high earlier in the session, is up 0.7% for the week.
· The Fed, set to meet for two days next week, recently suspended its three-year monetary policy tightening campaign, dropping forecasts for any interest rate hikes this year.
· The euro, which is hovering near its weakest level against the dollar since May 2017 amid worries about the strength of the euro zone economy, was up 0.19% at $1.1151, ahead of a national election in Spain on Sunday.
· The British pound, up 0.19% on Friday, was headed to finish the week down 0.5%, dragged down by growing concern about stagnant talks around Britains exit from the European Union, or Brexit.
· Spanish Prime Minister Pedro Sanchez looks set to regain power after his Socialists overcame a historic challenge by right-wing nationalists in elections on Sunday, a result he portrayed as a morale booster for the European Union.
The result is likely to come as a relief for supporters of further European Union integration ahead of May 26 elections for European Parliament amid fears that Vox could have gained a share of power in Spain.
Far left-wing party Podemos immediately offered to open coalition talks with Sanchez, though the two parties together cannot command a majority.
· German Economy Minister Peter Altmaier told Chinese Vice Premier Liu He on Saturday that he hoped the US-China trade dispute that has slowed global growth would soon be over.
· Xi Jinping sends message to US and West that ‘China is committed to opening up’ at Belt and Road forum
It was a message analysts say was aimed at the United States – though he did not directly mention the country or the protracted trade war between China and the US. And among all the heads of state, chiefs of global organisations, officials and entrepreneurs at the forum in Beijing, there were only low-level officials attending from Washington.
· Oil prices tumbled as much as 4% on Friday, extending early losses after President Donald Trump said he told OPEC to take action to temper fuel costs.
Still, U.S. West Texas Intermediate crude futures settled $1.91 lower at $63.30 per barrel, plunging 2.9% on the day and ending the week down 1.1%. WTI had been on track for its eighth successive weekly gain, the longest weekly run since the first half of 2015.
Brent crude futures fell $2.20, or 3%, to $72.15 per barrel, after hitting a one-week low at $71.31. Brent ended the week just barely positive, eking out a fifth weekly price gain, its longest winning streak in a year.
Reference: CNBC, Reuters, DW
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