The dollar was back on defense Friday morning, hurt by talk that Greece was close to a deal on a voluntary restructuring of its sovereign debt. Olli Rehn, the vice president of the European Commission, said that a deal should be announced today or over the weekend at the latest.
The dollar dropped to $1.3150 versus the euro, edging back toward a monthly low near $1.32. It's been a rough week for the dollar, which was sitting at a 17-month high of $1.2623 only 11 days ago.
The buck slid to $1.5712 versus the sterling, down fractionally from last night.
Weakness was more pronounced versus the yen, with the dollar dropping to Y76.90 from Y77.50.
Trading on Friday is likely to be impacted by the release of the Commerce Department's initial report on U.S. fourth quarter GDP. Economists expect GDP to increase by about 3.1 percent compared to the 1.8 percent growth seen in the third quarter.
Richmond Federal Reserve Bank President Jeffrey Lacker on Friday explained his dissenting vote at this week's FOMC meeting.
"I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for so long," Lacker said. "I expect that as economic expansion continues, even if only at a moderate pace, the federal funds rate will need to rise in order to prevent the emergence of inflationary pressures. This increase in interest rates is likely to be necessary before late 2014," he added.
Yesterday, a report from the Labor Department showed that initial jobless claims rebounded by a little more than anticipated in the week ended January 21st.
The Labor Department said jobless claims rose to 377,000 from the previous week's revised figure of 356,000, while economists had expected jobless claims to increase to 370,000.
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