Dollar Extends Losses Against Major Counterparts

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(RTTNews) - The U.S. dollar drifted lower against its major rivals on Friday as traders continued to assess the impact of the crisis in the banking sector, and looked ahead to the Federal Reserve's policy meeting next week.

According to reports First Republic Bank secured a $30 billion lifeline to shore up liquidity. In Switzerland, the Swiss National Bank lent financial support to Credit Suisse.

Meanwhile, traders expect the Fed to raise interest rate by 25 basis points next week.

CME Group's FedWatch tool currently indicates a 43.2% chance the Fed will leave rates unchanged and a 56.8% chance of a 25 basis point rate hike.

In U.S. economic news, the Fed released a report showing U.S. industrial production was unexpectedly unchanged in the month of February.

The Fed said industrial production was unchanged in February following a revised 0.3 percent increase in January. Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

A separate report from the University of Michigan showed consumer sentiment in the U.S. fell for the first time in four months in March.

The report said the consumer sentiment index slid to 63.4 in March from 67.0 in February. Economists had expected the index to be unchanged.

Surveys of Consumers Director Joanne Hsu noted the decrease was already fully realized prior to the failure of Silicon Valley Bank.

Meanwhile, the report showed decreases in both near-term and long-term inflation expectations, with year-ahead inflation expectations falling to the lowest level since April 2021.

The dollar index dropped to 103.69 before recovering to 103.90, but still remained weak, losing about 0.5% from the previous close.

Against the Euro, the dollar weakened to 1.0662 from 1.0609.

The dollar is weak against Pound Sterling at 1.2171, dropping from 1.2110.

Against the Japanese currency, the dollar weakened to 132.03 yen, losing ground from Thursday's close of 133.75 yen.

The dollar is weak against the Aussie at 0.6697, and against Swiss franc, it is trading at CHF 0.9271, down from CHF 0.9295.

Against the Loonie, the dollar is slightly stronger, fetching C$1.3738 a unit, after having weakened to C$1.3679 earlier in the day.

Swiss Shares Extend Losing Streak

The Swiss stock market closed under pressure again on Tuesday, stretching its losing streak to three sessions while giving up more than 130 points or 1.1 percent in that span.

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Eurozone Inflation Path Suggests ECB Unlikely To Cut Rates Further

Euro area inflation modestly accelerated to a four-month high, and the core figure was steady around the 2 percent target in August as a slight slowing in both food price growth and services inflation was offset by a smaller decline in energy prices, which suggests that the European Central Bank is set to hold interest rates steady in future policy sessions.

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European Markets Finish In The Red On Tuesday

The major European markets finished firmly under water on Tuesday after Eurostat data showed Eurozone inflation rose to 2.1 percent last month, climbing above the European Central Bank's 2 percent target for the first time since April driven by higher prices for food, alcohol and tobacco.

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U.S. Construction Spending Unexpectedly Edges Lower In July

A report released by the Commerce Department on Tuesday showed construction spending in the U.S. unexpectedly edged slightly lower in the month of July. The Commerce Department said construction spending slipped by 0.1 percent to an annual rate of $2.139 trillion in July after falling by 0.4 to a revised rate of $2.141 trillion in June.

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