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Dollar Slides To Monthly Low, Europe Expands Firewall


The dollar was weaker Friday morning in New York, on the final day of quarter that saw stocks go on an unexpected tear, diminishing the greenback's safe haven appeal.

Dovish remarks made earlier in the week by Federal Reserve Chairman Ben Bernanke have driven the dollar index to its lowest in a month.

There was little reaction to news that Euro-zone finance ministers have agreed to temporarily boost the size of their sovereign debt firewall to 800 billion euros.

The dollar dropped another penny to its lowest since November versus the sterling, hitting $1.6032 before stabilizing.

Versus the euro the dollar eased to $1.3376, staying near a recent low of $1.3384.

Eurozone inflation slowed less than expected in March, flash estimate published by Eurostat showed Friday.

Annual inflation fell to 2.6 percent in March from 2.7 percent in February. Economists were expecting the rate to ease to 2.5 percent.

Retail sales in Germany declined unexpectedly for a second consecutive month in February as concerns regarding rising fuel prices largely eclipsed positive sentiment from strong labor market conditions.

The calendar and seasonally adjusted retail sales fell 1.1 percent month-on-month in real terms in February, following a 1.2 percent drop in January.

The buck continue to give back gains versus the yen, sliding near Y82. Two weeks ago, the buck hit an 11-month peak above Y84.

Looking at the U.S. economic calendar, the Bureau of Economic Analysis is due to release its personal income & outlays report for February.

Economists expect the report, which is due out at 8:30 am ET, to show that personal income rose 0.4 percent and personal spending increased by 0.6 percent. In January, personal consumption rose by a mere 0.2 percent month-over-month.

The results of the Institute of Supply Management-Chicago's business survey for March are scheduled to be released at 9:45 am ET. Economists expect the business barometer index based on the survey to slip to 63 from 64 in February.

Additionally, the Reuters and the University of Michigan's final report on the consumer sentiment index for March is scheduled to be released at 9:55 am ET. The consumer sentiment index is expected to be upwardly revised to 75 from the mid-month reading of 74.3.

by RTTNews Staff Writer

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