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Dollar Slides As U.S. Consumer Inflation Misses Expectations

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The U.S. dollar was markedly lower against its major opponents in the European session on Friday, as the nation's consumer inflation improved less than forecast in April, supporting hopes for the Fed keeping the rate on hold for the foreseeable future.

Data from the Labor Department showed that the consumer price index rose by 0.3 percent in April after climbing by 0.4 percent in March. Economists had been expecting another 0.4 percent increase.

Core inflation inched up 0.1 percent for third consecutive month compared to economist estimates for a 0.2 percent up-tick.

Compared to the same month a year ago, consumer prices in April were up by 2.0 percent, reflecting a modest acceleration from the 1.9 percent growth in March.

Caution prevailed as U.S. decision to raise tariffs on Chinese goods went into effect following a failure to produce a breakthrough in talks held in Washington.

Investors awaited the outcome of negotiations continuing in Washington, in a last-ditch attempt to clinch a trade deal.

U.S. President Donald Trump said that there is "absolutely no rush" to finalize a trade agreement with China and talks were proceeding in a very "congenial" way.

The currency traded mixed against its major opponents in the Asian session. While it fell against the euro and the pound, it held steady against the franc. Against the yen, it rose.

The greenback was trading lower at 109.68 against the yen, following a rise to 110.05 at 9:45 pm ET. The greenback is seen finding support around the 108.00 region.

The greenback fell to 1.0104 against the franc, its lowest since April 18 and marked a 0.5 percent slide from a high of 1.0159 touched at 8:45 pm ET. The pair was valued at 1.0149 when it ended deals on Thursday. If the greenback extends fall, 1.00 is likely seen as its next support level.

The U.S. currency was 0.3 percent lower at 1.1247 against the euro, after having climbed to 1.1214 at 5:45 pm ET. At yesterday's close, the pair was worth 1.1214. The currency is poised to target support around the 1.14 mark.

Data from the Federal Statistical Office showed that Germany's exports rebounded at the fastest pace in three months in March, defying expectations for further decline.

Exports rose 1.5 percent month-on-month in March, after a revised 1.2 percent fall in February.

Following an advance to 1.2991 against the pound at 4:00 am ET, the greenback pulled back 0.3 percent to 1.3029 following the data. The pair was quoted at 1.2997 at Thursday's New York session close. Further downtrend may take the greenback to a support around the 1.325 level.

Data from the Office for National Statistics showed that the UK economy grew at a faster pace in the first three months of the year, in line with economists' expectations.

Gross domestic product grew 0.5 percent from the final three months of 2018, when it rose 0.2 percent.

The greenback fell back to 0.7007 against the aussie, not far from a 4-day low of 0.7019 seen at 9:45 pm ET. The greenback was trading at 0.6989 against the aussie at yesterday's close. Next key support for the greenback is seen around the 0.715 mark.

The greenback eased back to 0.6611 against the kiwi, just few pips short of a 3-day low of 0.6614 recorded at 9:45 pm ET. The kiwi-greenback pair had finished Thursday's trading session at 0.6590. The greenback is likely to target support around the 0.68 mark.

The greenback fell to a 9-day low of 1.3383 against the loonie, as the latter was underpinned by upbeat jobs data for April. The pair was trading at 1.3476 at Thursday's close. Should the greenback continues its fall, it may challenge support around the 1.31 level.

Data from Statistics Canada showed that the employment grew much higher than expected in April.

The employment rose by 107,000 jobs in April, up from forecasts for 11,700 jobs.

The unemployment rate declined to 5.7 percent from 5.8 percent.

The U.S. monthly budget statement for April is scheduled for release at 2:00 pm ET.

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