The dollar is falling against all of its major competitors Friday afternoon, after the U.S. GDP report for the second quarter came in weaker than anticipated. The U.S. currency is turning in its weakest performance against the Japanese Yen, after the Bank of Japan announced further stimulus.
Growth in U.S. economic activity in the second quarter accelerated from the first quarter, according to the initial estimate released by the Commerce Department on Friday, although the pace of growth came in well below economist estimates.
The report said gross domestic product climbed by 1.2 percent in the second quarter following a downwardly revised 0.8 percent increase in the first quarter. Economists had expected GDP to jump by 2.6 percent compared to the 1.1 percent growth that had been reported for the previous quarter.
After reporting a substantial rebound in Chicago-area business activity in the previous month, MNI Indicators released a report on Friday showing a modest pullback by its Chicago Business Barometer in the month of July.
The report said the Chicago business barometer edged down to 55.8 in July after surging up to 56.8 in June. A reading above 50 still indicates growth in Chicago-area business activity. Economists had expected the business barometer to dip to a reading of 54.0 after jumping to its highest level in over a year in the previous month.
While the University of Michigan released a report on Friday showing an upward revision to its consumer sentiment index for July, the index still came in below the reading seen in the previous month. The report said the final reading on the consumer sentiment index for July came in at 90.0 compared to the preliminary reading of 89.5. The index was still down from 93.5 in June.
The Bank of Japan raised the target for exchange-traded fund purchases and doubled its dollar lending program in addition to the fiscal stimulus that the government had unveiled two days ago.
However, investors were disappointed as the bank kept its interest rate and the pace of monetary base expansion unchanged on Friday. Moreover, BoJ today downgraded its projections for inflation and growth for fiscal 2016.
The dollar has dropped to over a 2-week low of Y102.060 against the Japanese Yen this afternoon, from an early high of Y105.456.
The unemployment rate in Japan fell to 3.1 percent in June, the Ministry of Internal Affairs and Communications said on Friday. That was beneath expectations for 3.2 percent, which would have been unchanged from the May reading.
The average of household spending in Japan was down 2.2 percent on year in June, the Ministry of Internal Affairs and Communications said on Friday - coming in at 261,452 yen. That was well shy of forecasts for a drop of 0.4 percent following the 1.1 percent decline in May.
Overall nationwide consumer prices in Japan were down 0.4 percent on year, the Ministry of Internal Affairs and Communications said on Friday - unchanged and in line with expectations. Core inflation sank 0.5 percent on year versus expectations for -0.4 percent, which would have been unchanged.
Industrial production in Japan was up 1.9 percent on month in June, the Ministry of Economy, Trade and Industry said on Friday. That beat forecasts for a gain of 0.5 percent following the 2.6 percent decline in May.
Retail sales in Japan were down 1.4 percent on year in June, the Ministry of Economy, Trade and Industry said on Friday. That missed forecasts for a decline of 1.2 percent following the 2.1 percent drop in May.
Japan's housing starts declined for the first time in six months in June, though at a slower-than-expected pace, the Ministry of Land, Infrastructure, Transport and Tourism said Friday.
Housing starts fell 2.5 percent year-over-year in June, reversing a 9.8 percent surge in the previous month, which was the biggest rise since June 2015. Economists had forecast a 2.7 percent drop for the month.
The buck sank to a 1-month low of $1.1197 against the Euro Friday, but has since rebounded to around $1.1165.
Eurozone economic growth halved in the second quarter, after France's economy halted, as the region braces for uncertainty emanating from the "Brexit" talks in the quarters ahead.
Gross domestic product climbed 0.3 percent from the first quarter, when it grew 0.6 percent, flash estimate from Eurostat showed Friday. A similar slower growth was last seen in the third quarter of 2015. The rate came in line with expectations.
Eurozone consumer prices increased for the second straight month in July, flash estimate from Eurostat showed Friday. Consumer prices climbed 0.2 percent year-on-year, following a 0.1 percent rise in June. Prices were expected to rise again by 0.1 percent.
The euro area jobless rate held steady at the lowest level since July 2011, data from Eurostat showed Friday. The unemployment rate remained unchanged at 10.1 percent in June, in line with expectations.
German retail sales decreased unexpectedly in June, data from Destatis revealed Friday. Retail sales dropped 0.1 percent in June from May, when turnover climbed 0.7 percent. This was the first drop in three months. Sales were expected to gain 0.1 percent.
The French economic growth remained flat in the second quarter, first estimate from the statistical office Insee showed Friday. Gross domestic product showed nil growth compared to 0.7 percent expansion seen in the first quarter. Economists had forecast a 0.2 percent rise.
France's EU measure of inflation accelerated further in July, preliminary data from INSEE showed Friday. The harmonized index of consumer prices, or HICP, rose 0.4 percent year-on-year following 0.3 percent increase in June. The figure was in line with expectations.
French consumer spending decreased for the third straight month in June, the statistical office Insee showed Friday. Household consumption expenditure dropped 0.8 percent in June as in May, confounding expectations for a 0.2 percent monthly rise. This was the third consecutive fall in spending.
The greenback slipped to a low of $1.3301 against the pound sterling Friday, but has since bounced back to around $1.3230.
U.K. mortgage approvals declined to a one-year low in June, the Bank of England reported Friday. The number of mortgages approved in June fell to 64,766 in June from 66,722 in May. This was the lowest since May 2015, when approvals totaled 64,174. It was forecast to drop to 65,500 in June.
Consumer confidence in the United Kingdom plunged in July, the latest survey from GfK revealed on Friday with an index score of -12. That was well shy of forecasts for -8 after coming in at -1 in May.
