The dollar is currently up against its major European competitors at the end of the trading week, but is losing ground against the Japanese Yen. The release of the minutes from the most recent meeting of the Bank of Japan was in focus Friday, as well as a series of U.S. economic reports.
Producer prices in the U.S. rose by more than anticipated in the month of May, according to a report released by the Labor Department on Friday, with the price growth largely due to a notable rebound by energy prices.
The Labor Department said its producer price index rose by 0.5 percent in May following a 0.7 percent decrease in April. Economists had been expecting producer prices to edge up by 0.2 percent.
With a sharp drop in utilities output offsetting increases in mining and manufacturing output, the Federal Reserve released a report on Friday showing that U.S. industrial production unexpectedly came in unchanged in the month of May.
The report said industrial production came in flat in May following a revised 0.4 percent decrease in April. Economists had expected production to rise by 0.2 percent compared to the 0.5 percent drop originally reported for the previous month.
Consumer sentiment in the U.S. has unexpectedly deteriorated in the month of June, according to a report released by Thomson Reuters and the University of Michigan on Friday, with the consumer sentiment index pulling back off a nearly six-year high.
The report showed that the preliminary reading on the consumer sentiment index for June came in at 82.7, down from the final May reading of 84.5, which was the highest since July of 2007. The decrease by the consumer sentiment index came as a surprise to economists, who had expected the index to come in unchanged compared to the previous month.
The members of the Bank of Japan's monetary policy board said that the Japanese economy had finally started to move to the upside, minutes from the board's meeting on May 21 and 22 revealed on Friday.
On the matter of ending the deflation that has plagued Japan for more than 15 years, some of the board members admitted that it could be difficult to attain the bank's new CPI target of 2 percent.
"Japan's economy has started picking up," the minutes said. "Exports have stopped decreasing as overseas economies have been moving out of the deceleration phase that had continued since last year and are gradually heading toward a pick-up. Business fixed investment continues to show resilience in non-manufacturing and appears to have stopped weakening on the whole. Public investment has continued to increase, and housing investment has generally been picking up."
The dollar has pulled back from Thursday's high of Y95.789 against the Japanese Yen on Friday, to around Y94.275, which is slightly above yesterday's low of Y93.776.
European Central Bank President Mario Draghi on Thursday defended the bond-buying program dubbed Outright Monetary Transactions, launched last year.
A day after Germany's top court wrapped up a hearing over ECB's bond buying programme, Draghi said in Berlin that the program has been beneficial to everybody; sovereigns, corporations, banks as well as individuals, and it has benefited both periphery and core countries. He reiterated that that OMT was necessary and in line with the mandate of price stability.
The European Central Bank on Friday said banks that participated in long-term refinancing operations will repay EUR 3.188 billion next week. Two banks will pay EUR 3.008 billion from the first three-year LTRO on June 19 and 2 other banks will repay EUR 180 million from the second operation.
The buck has rebounded from yesterday's low of $1.3389 against the Euro on Friday, to around $1.3320.
Eurozone employment fell notably in the first quarter of 2013, the latest figures published by Eurostat revealed Friday. The number of employed persons in euro area fell a seasonally adjusted 0.5 percent quarter-on-quarter to 415.1 million in the March quarter. This was faster than a 0.3 percent fall recorded in the fourth quarter of 2012.
Eurozone's annual inflation accelerated in May as initially estimated, final data released by statistical office Eurostat showed Friday. Inflation as per the harmonized index of consumer prices (HICP) moved up to 1.4 percent in May from 1.2 percent in April, in line with the preliminary estimates. In March, the inflation rate was 1.7 percent.
Bank of England policymaker Ian McCafferty on Friday said strict adherence to the inflation target will damage short-term output. In the new mandate Chancellor in March clarified that the Monetary Policy Committee can use its discretion to allow inflation to depart temporarily from the target, in order to provide a more stable path for output.
Bank of England Deputy Governor Paul Tucker on Friday announced his plan to leave the bank. The exact date of departure will be confirmed later, but it is likely to be in the autumn after Paul has provided support to the new Governor, Mark Carney, the BoE said in a statement.
The greenback rose to an early high of $1.5615 against the pound sterling Friday, but has since pulled back to around $1.5675.
A leading indicator of the British economy increased for the third straight month in April, suggesting that the improvement in economic growth so far this year may be sustainable, data released by research firm Conference Board showed Friday.
The leading economic index increased 0.2 percent on a monthly basis to 103.6 in April. This followed a 0.4 percent growth in March and a 0.6 percent gain in February. Four of the seven components made positive contributions to the headline index, the survey showed.
The volume of construction output in the UK declined less than expected in April, the latest figures from the Office for National Statistics showed Friday. The non-seasonally adjusted total volume of construction output in April was 1.1 percent lower than in April 2012. This was forecast to fall 4.1 percent.
U.K. house prices rose to the highest on record in May, driven by significant improvement in mortgage availability, data released by the LSL Property Services/Acadametrics showed Friday. House prices increased 0.4 percent from a month ago to GBP 233,061 in May. On a yearly basis, prices were up 2.7 percent, but slower than the 3.4 percent increase in April.
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