The dollar retreated on Friday (Dec 16) in profit-taking along with US stocks, but analysts said the prospects still looked good for gains in the greenback.
The dollar advanced about 1.2% this week after the U.S. central bank lifted rates on Wednesday and raised its projection to from two rate increases in 2017 to three. The ICE dollar Index has risen in eight of the past 11 weeks.
The ICE U.S. Dollar Index DXY, -0.28% was off by 0.2% at 102.81 on Monday.
On Thursday, the euro EURUSD, +0.3457% fell below the important support level of $1.0500, hitting its lowest level since January 2003. Euro recovered slightly on Friday, changing hands at $1.0447, up 0.3% from $1.4012 late on Thursday.
Against its Japanese counterpart, the dollar USDJPY, -0.21% was at ¥117.86, down 0.3% from ¥118.26 late Thursday.
New-home construction in the U.S. fell more than forecast in November after surging a month earlier to a nine-year high, indicating fitful progress in residential real estate and the latest sign of slower economic growth in the fourth quarter.
Residential starts slumped 18.7 percent to a 1.09 million annualized rate last month after rising to a 1.34 million pace, Commerce Department data showed Friday. The median projection in a Bloomberg survey called for a 1.23 million pace in November. Ground-breaking jumped 27.4 percent in October, the most since July 1982. Permits, a proxy for future construction, also fell last month on fewer applications to build apartments.
The Russian central bank announced Friday that it was keeping its key interest rate at 10 percent, but opened the door to a cut in the first half of 2017.
The Bank of Russia said consumer price growth is slowing down due to temporary factors and that the pace of inflation reduction continues to be "unstable".
Oil rose on Friday, edging closer to new 17-month highs as producers showed signs of adhering to a global deal to reduce output.
Oil producers including Kuwait, Saudi Arabia, and Abu Dhabi, who are members of the Organization of the Petroleum Exporting Countries (OPEC), have notified customers that they would cut supplies from January as part of an effort by OPEC and other producers led by Russia to balance an oversupplied market.
Brent crude oil futures were trading at $55.19 per barrel up $1.17, or 2.2 percent, at 2:39 p.m. ET (1939 GMT).
U.S. West Texas Intermediate (WTI) crude settled up $1, or 2 percent, at $51.90 per barrel.
Investment bank Goldman Sachs Friday revised its crude oil price forecast for the second quarter of 2017 on the back of a decision by OPEC members and other countries to cut production amid growing demand from consumers.
Goldman Sachs has upped its oil price outlook for the second quarter of 2017 to $57.50 a barrel from $55 a barrel for U.S. West Texas Intermediate crude. It also raised its price forecast for international benchmark Brent crude to $59 a barrel from $56.50 a barrel.
Japan's export performance improved strongly in November as rapid decline in the yen and a recovery in overseas demand boosted shipments from the trade sector, handily beating economists' expectations.
Reference: Bloomberg, CNBC, Reuters, Channel News Asia, Market Watch
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