Forexpros – The U.S. dollar was broadly higher against its major counterparts on Friday, as worries over the outlook for global economic growth and lowered expectations for further easing measures by central banks supported demand for the safe haven greenback.
During European late morning trade, the dollar was higher against the euro, with EUR/USD falling 0.29% to hit 1.2270.
Sentiment on the euro remained vulnerable after the European Central Bank said in its monthly bulletin on Thursday that the economic outlook for the euro zone faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
The ECB revised down its forecast for economic growth to 0.6% in 2013, down from 1% previously and forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast of for a 0.2% contraction.
In addition, optimism that the ECB will soon move to cut high Spanish and Italian borrowing costs faded as investors waited for more details of the bank’s proposed bond buying program to emerge.
Also Friday, official data showed that industrial production in France was unexpectedly flat in June, disappointing expectations for a 0.4% rise and following a downwarldy revised 2.1% decline the previous month.
The greenback was also higher against the pound, with GBP/USD shedding 0.21% to hit 1.5604.
Official data showed earlier that producer price inflation input in the U.K. rose less-than-expected in July, ticking up 1.3%, after a 2.9% fall the previous month, disappoiting expectations for a 1.5% rise.
Elsewhere, the greenback was lower against the yen but higher against the Swiss franc, with USD/JPY edging down 0.15% to hit 78.45 and USD/CHF rising 0.29% to hit 0.9790.
In addition, the greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD adding 0.19% to hit 0.9930, AUD/USD dropping 0.56% to hit 1.0520 and NZD/USD declining 0.30% to hit 0.8096.
Earlier in the day, the Reserve Bank of Australia raised its 2012 growth forecast on stronger-than-expected household demand, while saying the sustained currency strength could prove more of a drag on the economy than in the past.
The export-related currencies also came under pressure after official data showed that China’s trade surplus narrowed unexpectedly in July, dropping to USD25.1 billion from a USD31.7 billion surplus.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up -%, to trade at -.
The greenback also found support after Thursday’s strong U.S. economic data dampened speculation that the Federal Reserve may announce a third round of quantitative easing in the near future.
Later in the day, the U.S. was to release official data on import prices.
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