Closing the Week with Forexpros
The dollar rose against most major currencies on Friday after disappointing business activity and consumer sentiment data published in the U.S., sparking a risk-off trading session that sent investors chasing the safe and liquid greenback.
In U.S. trading on Friday, EUR/USD was down 0.45% at 1.2854.
In the U.S., the Chicago purchasing managers’ index dropped to a seasonally adjusted 49.7 compared to 53.0 August. Analysts had expected the Chicago PMI to remain unchanged at 53.0 in September.
Consumers, meanwhile, remain wary in the world’s largest economy, separate data showed.
The Thomson Reuters/University of Michigan’s final index on consumer sentiment for September fell to a seasonally adjusted 78.3 from a prelimiary reading of 79.2. Analysts had expected the index to fall to 79.0 in September. The index was up strongly from the final reading of 74.3 in August.
The dollar did see some selling after Spain announced that the country’s bank stress tests revealed financial institutions need EUR60 billion to return to health. The capital shortfall came in largely in line with expectations, which sparked some appetite for risk.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.55% at 1.6145.
The greenback also strengthened against the yen. USD/JPY was trading at 78.08, up 0.61%, up from a session low of 77.44 and off a high of 78.11. The pair was likely to find support at 77.44, the earlier low, and resistance at 78.15, Monday’s high.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.48% at 80.01.
Gold prices dropped in U.S. trading on Friday after investors sold the precious metal for profits.
Gold hit a six-month high recently in wake of the Federal Reserve’s decision to implement a third round of quantitative easing to stimulate the U.S. economy, which weakens gold’s traditional hedge, the dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 0.46% at USD1,772.35 a troy ounce, up from a session low of USD1,769.65 and down from a high of USD1,785.65 a troy ounce. Gold futures were likely to test support at USD1,755.35 a troy ounce, Thursday’s low, and resistance at USD1,785.65, the earlier high.
The U.S. Federal Reserve is currently running a third round of quantitative easing, a monetary stimulus tool that sees the U.S. central bank buy USD40 billion in mortgage-backed securities a month on an open-ended basis to spur recovery. Such policy tools weaken the greenback and make gold an attractive hedge.
Elsewhere on the Comex, silver for December delivery was down 0.26% and trading at USD34.575 a troy ounce, while copper for December delivery was up 0.24% and trading at USD3.753 a pound.
Crude oil futures gained in U.S. trading on Friday after Spain unveiled an emergency budget and added its banking-sector stress tests met expectations, which boosted demand for the growth-sensitive commodity.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at USD92.07 a barrel on Friday, up 0.24%, off from a session high of USD92.72 and up from an earlier session low of USD91.43.
On Thursday, the Spanish government unveiled a crisis budget for 2013 calling for cuts to ministry budgets by 8.9% for next year and a freeze on public-sector wages for a third year.
Meanwhile, Spanish bank stress tests revealed the country’s financial institutions need EUR60 billion to return to health. The capital shortfall came in largely in line with expectations, which sent oil gaining.
On the ICE Futures Exchange, Brent oil futures for November delivery were down 0.25% and trading at USD112.06 a barrel, up USD19.99 from its U.S. counterpart.
U.S. stocks opened sharply lower on conflicting U.S. economic data and continued euro zone debt fears.
At the open of U.S. trade, the Dow Jones Industrial Average fell 0.66%, the S&P 500 index gave back 0.65%, while the Nasdaq Composite index dropped 0.54%.
Stocks moving early include Research in Motion trading higher by 12% after reporting a smaller loss than expected and Hartford Financial trading higher by 2.02% after announcing a sale of its life insurance unit to Prudential.
Facebook is up nearly 4% on word of its Facebook gifts launch.
Sony has slipped 2.6% after announcing it will take an 11% stake in troubled camera make Olympus.
U.S. markets were flat to lower in the last two hours of trading. For the day the S&P 500 was down 0.45% at 1,440.67, the Nasdaq Composite was down 0.65% at 3,116.23 and the Dow Jones Industrials lost 0.36% to close at 13,437.13.
In mid European trade, the EURO STOXX 50 fell 1.04%, France’s CAC 40 dropped 0.13%, while Germany’s DAX 30 gave back 0.47%.