The dollar wallowed at its lowest in over a week against a basket of major currencies early on Friday, having suffered yet another setback overnight in the hands of more underwhelming U.S. economic data. The dollar index fell as far as 97.282, reaching a low last seen on April 8. It was last at 97.676, down 1.7 percent on the week. It has shed 2.7 percent from a 12-year peak of 100.39 set last month.
Frustrating dollar bulls, housing starts rose far less than expected in March, extending a string of disappointing data that suggested the economy could struggle to rebound from a soft patch in the first quarter. Atlanta Federal Reserve Bank president Dennis Lockhart said the recent “murky” run of U.S. data has him leaning against a June interest rate hike. Lockhart quickly added he was confident the economy will remain on track.
“Right now position, data flow and policy comments are working against USD, so even committed longs are trimming positions,” said Steven Englander, CitiFX head G10 strategist. “We do not think this will last, and suspect most investors feel the same, but sensibly feel there needs at least one or more of positioning, policy statements and incoming data to be on their side before extending USD longs.”