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Dollar Weakens Further As Investors Brace For Trade War


The dollar is down against all of its major rivals Friday afternoon, extending its losses from Thursday afternoon. The currency reversed yesterday on concerns about the impact President Donald Trump's plans to impose new tariffs on steel and aluminum imports will have on global trade.

Trump indicated Thursday that he plans to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports.

Consumer sentiment in the U.S. improved by slightly less than initially estimated in the month of February, according to a report released by the University of Michigan on Friday, although the consumer sentiment index was still up sharply from January.

The report said the final reading on the consumer sentiment index for February came in at 99.7 compared to the initial estimate of 99.9. Economists had expected the index to be downwardly revised to 99.5.

The dollar has dropped to around $1.2325 against the Euro Friday afternoon, from an early high of $1.2251.

Eurozone producer price inflation eased in January on energy prices, data from Eurostat showed Friday. Producer prices advanced 1.5 percent year-on-year, slower than the 2.2 percent increase logged in December. Prices were expected to climb 1.6 percent.

Germany's retail sales declined unexpectedly in January, figures from Destatis showed Friday. Retail sales decreased 0.7 percent month-on-month in January, confounding expectations for an increase of 0.7 percent. Sales had fallen 1.1 percent in December.

Germany's import price inflation eased to the lowest since late 2016, data from Destatis showed Friday.

Import prices climbed 0.7 percent year-on-year in January, in line with expectations, but slower than December's 1.1 percent increase. This was the slowest rate since November 2016, when prices grew 0.3 percent.

At the same time, export prices advanced 0.7 percent on year after climbing 1 percent in the previous month. On a monthly basis, export prices advanced 0.3 percent.

Germany's wholesale sales declined at the end of the year, after rising in the previous seven months, data from Destatis showed Friday. In real terms, wholesale sales dropped a price-adjusted 1.0 percent year-over-year in December, reversing a 4.1 percent rise in November.

The buck has slipped to around $1.3785 against the pound sterling Friday afternoon, from a high of $1.3754.

The UK construction sector continued to expand at a subdued pace as fragile business sentiment and political uncertainty hinder client demand, survey data from IHS Markit showed Friday.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers' Index rose to 51.4 in February from a 4-month low of 50.2 in January. The reading was above the expected level of 50.5.

The greenback has tumbled to a 16-month low of Y105.485 against the Japanese Yen Friday afternoon, from an early high of Y106.298.

The unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in January, the Ministry of Internal Affairs and Communications said on Friday. That was well beneath forecasts for 2.8 percent, which would have been unchanged from the December reading.

The monetary base in Japan was up 9.4 percent on year in February, the Bank of Japan said on Friday - standing at 471.638 trillion yen. That follows the 9.7 percent spike in January.

by RTT Staff Writer

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