Dollar dips on weak data, yen hurt by cautious BOJ
By Karen Brettell
NEW YORK (Reuters) -The dollar fell against the euro on Friday on weaker than expected U.S. economic data but gained against the Japanese yen after Bank of Japan (BOJ) governor Kazuo Ueda said it was too soon to declare victory on inflation.
In cryptocurrencies, bitcoin held just below a more than two-year high reached on Wednesday.
U.S. manufacturing slumped further in February, with a measure of factory employment dropping to a seven-month low amid declining new orders. Construction spending, which had been expected to increase, also fell in January.
Economists at Goldman Sachs cut their gross domestic product (GDP) estimate for the first quarter by 0.2 percentage points to 2.2% after the data.
The dollar has been largely rangebound with traders focusing closely on economic data for any new clues on when the U.S. Federal Reserve is likely to begin cutting interest rates.
Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, noted that “the U.S. is the key side of it,” in terms of driving currency moves. The greenback had looked like it was going to break higher in the past few days, but failed after Friday’s turn lower, he added.
The dollar was also pulled down in line with shorter-dated Treasury yields on Friday after Fed Governor Chris Waller said he would like the U.S. central bank to address a reset of the balance sheet towards shorter-term Treasury bills that would better match the short-term policy rate that the Fed controls as its key monetary policy tool.
The next major U.S. economic release will be February’s employment report due next Friday.
The dollar index fell 0.23% to 103.87. The euro gained 0.31% to $1.0837.
Data on Friday showed that euro zone inflation
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