During early deals on Friday, the US dollar showed mixed performance against its major counterparts. While the dollar slipped to a 3-day low against the yen, it strengthened against the European majors. The dollar climbed to 2-day highs against the euro, the pound and the franc.
The pace of U.S economic growth accelerated in the second quarter, according to a report released by the Department of Commerce on Thursday, although the pace of growth came in well below economist estimates.
The report showed that gross domestic product increased by 1.9 percent in the second quarter following a revised 0.9 percent increase in the first quarter. Economists had expected GDP to grow 2.3 percent compared to the 1.0 percent growth originally reported for the previous quarter.
The economy grew at a slower pace than previously thought from 2005-2007, revised data from the government showed Thursday. The updated statistics also showed that the economy actually shrank in the last 3 months of 2007.
The new information provides more fodder for those analysts who have said that the U.S. has already entered into a recession.
The dollar, which closed yesterday's trading at 107.87 against the yen, fell to a 3-day low of 107.34 during early deals on Friday. The next downside target level for the dollar is seen around 106.6 against the Japanese currency.
Apart from the dollar, the yen gained against other major currencies today as a drop in stock prices resulted in 'unwinding of carry trade'. Japan's 0.5% interest rate is the lowest in the industrialized world, where the speculators get funds with low borrowing costs and invest in one with higher returns, earning the spread between the two. The risk is currency fluctuations erase profits between the two rates.
In early trading on Friday, the US dollar strengthened to a 2-day high of 1.9768 against the British pound, compared to 1.9841 hit late Thursday in New York. The immediate resistance for the dollar is seen around the 1.975 level.
Against the European single currency, the dollar rose to a 2-day high of 1.5552 during early deals on Friday. If the dollar gains further, it may test resistance around the 1.552 level. The pair was worth 1.5603 at Thursday's close.
German retail sales declined 3.9% year-on-year in real terms in June, much greater than the 0.8% slump expected by economists. The decline is in contrast to a 1% increase in May, revised up from the initially reported 0.7%. On a monthly basis, retail sales were down calendar and seasonally adjusted 1.4% in real terms in June, greater than economists' forecast for a 0.5% fall.
During early deals on Friday, the dollar advanced against the franc and hit a 2-day high of 1.0500 at 10:15 pm ET. Since then, the pair has been showing choppy trading and is now worth 1.0489 with 1.052 seen as the next target level. The dollar-franc pair closed yesterday's trading at 1.0474.
Markets will now focus on the manufacturing PMI reports from Germany, France, Italy and the Euro-zone for the month of July, which are expected in the upcoming hours.
Turning to the US, today will be a busy day with the releases of the change in nonfarm payrolls, unemployment rate, ISM manufacturing and construction spending reports.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.