Daily Afternoon Report 31.03.2017

The dollar was slightly lower against other major currencies on Friday, after the release of mixed U.S. economic reports, but overall optimism over the strength of the economy maintained the greenback near a recent two-and-a-half week peak.

EUR/USD was steady at 1.0682, off the previous session’s two-week low of 1.0669.

In a revised report, the University of Michigan said its consumer sentiment index slipped to 96.9 in March from an initial estimate of 97.6 and confounding expectations for an unchanged reading.

The data came after the U.S. Commerce Department said personal spending rose 0.1% in February, compared to expectations for a gain of 0.2% and after a 0.2% rise in January.

Personal income, meanwhile, rose by 0.4% in January, in line with expectations and after rising 0.3% a month earlier.

A separate report showed that the Chicago purchasing managers’ index rose to 57.7 this month from 57.4 in February, confounding expectations for a decline to 56.9.

In the euro zone, Eurostat earlier reported that the consumer price index rose 1.5% in March, below expectations for an increase of 1.8% and following a final reading of a 2.0% advance in the prior month.

Core CPI, which excludes food, energy, alcohol, and tobacco costs, increased by 0.7% in March compared to expectations for a 0.8% rise.

Elsewhere, GBP/USD was little changed at 1.2463. The U.K. Office for National Statistics earlier said its final reading of fourth quarter gross domestic product was an increase of 0.7%, in line with expectations and a previous estimate.

Year-on-hear however, GDP rose 1.9% in the fourth quarter, below expectations and a previous estimate for a growth rate of 2.0%.

A separate report showed that the U.K. current account deficit narrowed to £12.1 billion in the fourth quarter of 2016 from £25.7 billion in the third quarter, whose figure was revised from a previous estimate of 25.5 billion.

Analysts had expected the current account deficit to narrow to just £16.0 billion in the last quarter.

USD/JPY fell 0.21% to 111.71, while USD/CHF held steady at 1.0010.

Earlier Friday, data showed that Japan’s household spending dropped by an annualized rate of 3.8% last month, compared to expectations for a 1.7% fall.

A separate report showed that Japan’s CPI rose 0.2% in February, year-on-year, in line with expectations and up from a 0.1% gain the previous month.

The Australian dollar was steady, with AUD/USD at 0.7636, while NZD/USD slipped 0.11% to 0.6984.

Meanwhile, USD/CAD shed 0.28% to 1.3301 after Statistics Canada said the country’s GDP rose 0.6% in January, beating expectations for an increase of 0.3% and up from a growth rate of 0.3% in December.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.11% at 100.34, still close to a two-and-a-half week high of 100.47 hit overnight.