Dollar Rallies Versus European Majors
The dollar ended a volatile week on a strong note Friday, as traders shied away from major European rivals amid doubts the region can contain its sovereign debt crisis.
German and the European Central Bank continued to haggle over terms of a Greek bailout, even as Athens pledged new austerity measures and faster privatizations.
German officials want private investors to bear some of the risks associated with Greece, while the ECB says such a plan would imperil the fragile European banking system.
U.S. import prices continued to rise for the eighth consecutive month in May, according to figures released by the Department of Labor on Friday.
The import price index increased 0.2 percent in May following a 2.1 percent increase in April and a 3 percent increase in March.
The dollar jumped to $1.4325 against the euro, up sharply from a monthly low near 1.47 touched earlier in the week.
The dollar also rallied versus the sterling, hitting $1.6220 from near $1.64.
Modest gains took the dollar to Y80.30 versus the yen, having touched a monthly low near 79.70 on Wednesday.
Falling commodity prices helped the dollar gain a bit of ground versus its Canadian counterpart. The buck was slightly more than two cents below par in afternoon dealing.
In economic news from around the globe, British industrial output fell more than expected in April due to extra public holidays and supply chain disruptions caused by the Japanese earthquake and tsunami, official data showed Friday.
The index of industrial production dropped 1.7 percent month-on-month compared to an increase of 0.2 percent in March, according to figures published by the Office for National Statistics. Economists were expecting output to remain flat in April.
Canada’s economy generated 22,000 jobs in May, in line with expectations, but well short of the increase seen in the previous month, official data showed Friday.
Still, the unemployment rate dropped to 7.4. percent from 7.6 percent, as more Canadians gave up looking for work. This is the lowest unemployment rates since the summer of 2008.
