The U.S. dollar index, which tracks the greenback’s performance against a basket of six major peers, fell 0.76% to 93.02 late Friday, the lowest since August 2015. The index finished the week with 2.14% losses.
The dollar weakened across the board, following the Federal Reserve’s announcement to leave interest rates unchanged on Wednesday, while indicating that any further rate rises would be data dependent.
A report released in the U.S. on Thursday revealed that the economy grew at the slowest pace in two years from January to March, rising just 0.5% from a year before. A separate report released on the following day, indicated that both personal spending and the personal consumption expenditures price index, which is the Federal Reserve’s preferred inflation measure, grew 0.1% in the previous month.
The yen continued to build on strong gains, as the central bank of Japan did not announce any further easing measures at its policy meeting on Thursday, surprising expectations for further stimulus measures.
The USD/JPY pair slumped 1.54% to 106.45 late Friday, the lowest level since October 2014. The major finished the week losing 4.49%, the weakest weekly performance since the 2008 financial crisis. The yen also fell against the single currency, with EUR/JPY dropping 0.73% to 121.94 late Friday. The pair finished the prior session with a 2.73% loss.
The euro registered almost three-week highs against the greenback, with EUR/USD rising 0.9% to 1.1453. The single currency found support after the release of a report showing that the eurozone economy grew at the fastest pace in five years from January to March, with the gross domestic product advancing 0.6%, exceeding expectations for a 0.4% growth. The bloc’s economy registered an annual growth of 1.6%. A separate report showed, however, that the euro area dipped into inflation in April, with consumer prices dropping 0.2% from a year earlier.
Meanwhile, the British pound advanced to 12-week highs against the greenback, with the GBP/USD pair reaching 1.4670, the highest level since early February 2016 and was last at 1.4602, finishing the week with 1.09% gains. The sterling remained underpinned, amid diminishing concerns that the much-awaited referendum will lead to a vote for Britain to leave the E.U.
In the coming week, market participants will be monitoring Friday’s U.S. jobs report for April, while also looking at manufacturing and service sector activity data from the U.S., U.K. and China.
Today, investors will be turning their attention to Mario Draghi’s speech at an event in Frankfurt, Germany, and to the U.S. Institute for Supply Management report for its monthly manufacturing PMI data.