The dollar plunged against other major currencies, its first time since Monday, ending its weekly advance as investors analyzed the prospects of U.S. economic expansion against indications by Federal Reserve that it will increase interest rates in 2015.
Australian dollar and other high-yielding currencies such as the Canadian dollar rose. The Bloomberg Dollar Spot Index, which compares the dollar against 10 major currencies, fell from a five-week peak it hit after the Fed Chair Janet Yellen announced that interest rates will begin increasing six months once the central bank winds down its bond-buying program.
“What we’re seeing is a bit of a disappointment in the lack of follow-through strength of the dollar,” said Brian Daingerfield, a currency analyst at Royal Bank of Scotland Group Plc in Stamford, Connecticut in a call with Bloomberg. “While we have got that change from the Fed on forward guidance, we haven’t got any data to back up a hawkish or dovish Fed.”
The dollar fell 0.1 percent to $1.3794 per euro, after gaining to $1.3749 on Thursday, its strongest such gain since March 6. The dollar also slid 0.1 percent against the yen to 102.25 yen. However, the yen remained slightly unchanged at 141.01 a euro.
The Bloomberg Dollar Spot Index fell 0.2 percent to stand at 1,019.26 at close of New York trade after advancing 0.6 percent earlier this week. The Australian dollar gained 0.5 percent against the dollar to 90.81 U.S. cents, raising its average weekly gain 0.6 percent.
The Canadian dollar advanced the most-0.2 percent to C$1.1221 for a U.S. dollar- after data released by Statistics Canada showed that retail sales surged 1.3 percent, the highest in eight months, in January.
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