Dollar Retreats After Recovering From Early Weakness

(RTTNews) - The U.S. dollar fell in the Asian session on Friday, and after rebounding smartly on data showing an acceleration in the pace of consumer price growth in the U.S., retreated amid speculation the Fed might slow down the pace of interest rate hikes in the coming months.

Data from the Commerce Department showed the annual rate of growth by the personal consumption expenditures price index accelerated to 6.8% in June from 6.3% in May, showing the fastest growth since January 1982.

The annual rate of growth by core consumer prices, which exclude food and energy prices, also accelerated to 4.8% in June from 4.7% in May.

The inflation data, which is said to be preferred by the Federal Reserve, was included in a report showing personal income increased by slightly more than expected in the month of June.

Data released on Thursday had showed the U.S. economy contracting by 0.9% in the June quarter, versus expectations of a 0.5% growth. In the first quarter, the GDP had contracted by 1.6%.

The dollar index, which fell to 105.54 in the Asian session, rallied to 106.66 in the New York session before paring gains and dropping to 105.82, losing more than 0.5% from the previous close.

Against the Euro, the dollar weakened to $1.0227 after having firmed to $1.0147 earlier in the session. Data from Eurostat showed the Eurozone economy grew 0.7% in the June quarter, versus market expectations of a 0.2% growth. The first quarter's growth stood downwardly revised to 0.5%.

Annual inflation rate in the Euro Area increased to a new record high of 8.9% in July, versus 8.6% in June, which the markets were expecting.

The dollar is down slightly against Pound Sterling at $1.2184.

Against the Japanese currency, the dollar is weak, fetching 133.25 yen a unit, compared with 134.25 yen Thursday evening.

The dollar is down marginally against the Aussie at 0.6996. Against Swiss franc, the dollar weakened to CHF 0.9513 from CHF 0.9551.

The Loonie is up marginally against the dollar at C$1.2797, firming from C$1.2857, as oil prices rose sharply.