The Bank of Japan announced at the conclusion of its meeting on Friday, that it will employ a negative interest rate of -0.1% and that it will trim rates further if necessary. On the announcement of the decision, the USD/JPY pair advanced 1.70% to 120.82.
In the meantime, market participants eyed the release of the U.S. Q4 growth data, scheduled to be published later in the day, after the Fed failed to provide any signals on the pace of future rate hikes in its remarks on Wednesday. The U.S. central bank left rates unchanged at the conclusion of its two-day meeting, after hiking rates in December.
The greenback lost ground following the release of a report on Thursday, indicating that U.S. pending home sales increased less than expected in December, whereas durable goods orders fell way more than forecasted in the same month.
The euro fell 0.24% against the dollar, to trade at 1.0913. Another report released on Friday, revealed that the rate of inflation in the eurozone advanced 0.4% YoY in January, in accordance with expectations and following a 0.2% rise in December. In the meantime, core CPI, excluding food and energy costs, rose by 1.0% this month, surpassing expectations for a 0.9% increase and following a 0.9% rise.
Another report released on the same day, revealed that German retail sales dropped by 0.2% last month, against forecasts for a 0.5% rise and following a 0.4% gain in December. Elsewhere, official data showed that the gross domestic product of Spain advanced 0.8% in the fourth quarter, in line with expectations.
The dollar was stronger against the British pound and the Swiss franc, with the GBP/USD pair losing 0.14% at 1.4339 and the USD/CHF up 0.44% at 1.0181.
Meanwhile, the commodity-related loonie remained underpinned as oil prices were around $33 a barrel last Tuesday, after dropping to 12-year lows below $27 in the previous week. The greenback was higher 0.12% against its Canadian counterpart to 1.4047, still near Thursday’s three-week low of 1.3946.
Elsewhere, the Australian and New Zealand dollars were up, with AUD/USD gaining 0.08% to trade at 0.7090 and with NZD/USD climbing 0.27% at 0.6497.
The U.S. dollar index, which tracks the greenback’s performance against a group of six other counterparts, gained 0.43% at 99.05, higher than last session’s two-week bottom of 98.45.