Dollar Loses Ground Against Major Counterparts On Rate Cut Bets

(RTTNews) - The U.S. dollar weakened against its major counterparts on Friday amid bets the Federal Reserve will likely cut interest rate in June after data showed a slowdown in manufacturing activity in the U.S., and a drop in consumer sentiment.

Data from the Institute for Supply Management showed that the manufacturing PMI dipped to 47.8 in February from 49.1 in January, with a reading below 50 indicating contraction. Economists had expected the index to inch up to 49.5.

The University of Michigan also released revised data showing consumer sentiment in the U.S. unexpectedly deteriorated in the month of February.

The report said the consumer sentiment index for February was downwardly revised to 76.9 from the previously reported 79.6. Economists had expected the reading to be unrevised.

With the unexpected downward revision, the consumer sentiment index is now below the January reading of 79.0.

Data released on Thursday showed inflation dropped in France, Germany and Spain slowed. Today, flash data from Eurostat showed Eurozone inflation softened for the second straight month in February. The harmonized index of consumer prices rose 2.6% annually after rising 2.8% in January. Prices were forecast to climb 2.5%.

Core inflation that excludes energy, food, alcohol and tobacco eased to 3.1% from 3.3% a month ago, the data showed. However, this was above economists' forecast of 2.9%. On a monthly basis, the HICP gained 0.6% in February.

The dollar index dropped to 103.84, down nearly 0.3% from previous close.

Against the Euro, the dollar weakened to 1.0836, and against Pound Sterling, it eased to 1.2657.

The dollar gained against the Japanese currency, fetching 150.15 yen a unit, off the day's high of 150.73 yen.

Against Swiss franc, the dollar shed ground and was at CHF 0.8834 a dollar. At 0.6527, the dollar was down 0.5% against the Aussie. The Loonie was up against the dollar, at C$1.3563.