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Dollar Loses Ground Against Other Major Currencies

The U.S. dollar was weak against most major currencies on Friday, reacting data showing weak manufacturing and services sector activity in the month of February.

The pound sterling firmed up on encouraging data on UK manufacturing activity, and a stronger than expected expansion in German manufacturing activity pushed up the euro.

Markets were also reacting to reports that showed increasing number of coronavirus infections in Beijing as well as outside China.

According to Chinese health officials, the death toll in China's novel coronavirus has gone up to 2,236 with 118 more deaths reported, mostly from the hard-hit Hubei province.

South Korea declared a "special management zone" around a southeastern city as health authorities reported 52 new cases of the illness, raising the tally in the country to 156.

Existing home sales in the U.S. pulled back in January after jumping in December, according to a report released by the National Association of Realtors on Friday, with existing home sales continuing a fluctuating pattern of monthly increases and declines.

NAR said existing home sales slumped by 1.3% to an annual rate of 5.46 million in January after surging up by 3.9% to a revised rate of 5.53 million in December. Economists had expected existing home sales to tumble by 1.8%.

Despite the monthly decrease, the report noted existing home sales in January were up by 9.6% compared to the same month a year ago.

The IHS Markit US Composite PMI fell to 49.6 in February 2020 from 53.3 in the previous month, pointing to the first month of contraction in the private sector since October 2013.

The IHS Markit US Manufacturing PMI fell to 50.8 in February of 2020 from 51.5 in January, while Services PMI dropped to 49.4 in the month, from 53.4 a month earlier.

The dollar index, which opened flat at 99.87, declined to 99.23 by mid morning, and has been moving in a tight range since then. It was last seen at 99.34, more than 0.5% down from previous close.

Euro area private sector grew for a third straight month and at the fastest pace in six months in February, mainly led by further expansion of the services sector, though there were signs of demand and production being hurt by the coronavirus outbreak in China.

The flash composite purchasing managers' index, or PMI, climbed to 51.6 from 51.3 in January, preliminary survey data from IHS Markit showed.

The flash services PMI rose to a two-month high of 52.8 from 52.5 in January. The flash manufacturing PMI output index climbed to an eight-month high of 48.4 from 48 in January.

Against the Euro, the dollar weakened to $1.0865 before recovering a bit to $1.0847, still down nearly 0.6% from previous close.

Against Pound Sterling, the dollar slipped to $1.2957, losing about 0.6%, after data showed UK manufacturing grew at the fastest pace in 10 months in February, while the services sector expanded at the slowest pace in two months, leading to stable growth of the private sector survey data showed Friday.

The Japanese Yen was stronger by nearly 0.5%, at 111.56 yen a dollar, compared to 112.10 yen a dollar.

The dollar weakened to 0.9783 against Swiss franc. The Aussie-Dollar pair was at 0.6627, up nearly 0.2% from previous close.

Against the Loonie, the dollar was weak at 1.3324, compared to 1.3259 on Thursday. Data from Statistics Canada showed Retail sales in Canada were unchanged in December 2019, following an upwardly revised 1.1% gain in the previous month.

Retail Sales increased 2.4% in December of 2019 over the same month in the previous year.

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