U.S. Dollar Moves Lower Amid Easing Interest Rate Concerns

The value of the U.S. dollar has moved to the downside during trading on Friday, with easing concerns about the outlook for interest rates reducing the appeal of the safe-haven commodity.

The U.S. dollar index has moved steadily lower over the course of the day and is currently down 0.49 points or 0.5 percent at 104.54.

Currently, the greenback is trading at 135.83 yen versus the 136.77 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0634 compared to yesterday's $1.0597.

The pullback by the dollar comes amid easing concerns about the outlook for interest rates following recent comments from Federal Reserve officials and the latest economic data.

The Institute for Supply Management released a report this morning showing a very slight slowdown in the pace of growth in U.S. service sector activity in the month of February.

The ISM said its services PMI edged down to 55.1 in February from 55.2 in January, although a reading above 50 still indicates growth in the sector. Economists had expected the index to slip to 54.5.

The report also showed the prices index fell to 65.6 in February from 67.8 in January, pointing to a slowdown in the pace of price growth.

"Overall, there isn't much in the ISM services report to suggest the Fed needs to raise rates significantly higher than previously planned," said Andrew Hunter, Deputy Chief US Economist at Capital Economics.

A comment in the Federal Reserve's monetary policy report saying "high inflation is not becoming entrenched" further offset recent interest rate concerns.

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