×

Dollar Slips Against Euro Ahead of Economic Data Next Week

The dollar fell against the euro and British pound Friday ahead of a week loaded with economic data, while the U.S. currency hit a 4 1/2-year high against the yen.

The 13-nation euro bought $1.3466 in afternoon New York trading, up from $1.3387 late Thursday.

Meanwhile, the British pound moved closer to the $2 mark, rising to $1.9994 from $1.9922. The pound broke through $2 in April for the first time since the early 1980s.

The dollar climbed as high as 124.12 yen before backing down to 123.87 yen in afternoon trading. The yen also plunged to a record low against the euro, with traders borrowing the Japanese currency at its lower interest rate to invest in better yielding assets overseas. Returning those funds to Japan would lift the yen.

"It was a light week on economic data in the States. So, there was some trepidation in buying the dollar going into next week, which is heavy on data," said Michael Woolfolk, a senior currency analyst at the Bank of New York.

The Conference Board reports its monthly Consumer Confidence Index on Tuesday. The Commerce Department releases its May durable goods orders report on Wednesday, its final first-quarter gross domestic product report on Thursday and its May personal income and spending on Friday.

Additionally, the Federal Reserve meets Wednesday and Thursday to discuss interest rates. Most analysts expect the central bank to keep rates unchanged at 5.25 percent as it has for the past year.

At the same time, analysts expect the European Central Bank and other foreign central banks to hike their interest rates during the third quarter, which would weigh heavily on the dollar.

Higher interest rates, a weapon against inflation, can strengthen a currency by making investments denominated in it more attractive. The European Central Bank has been raising rates over recent months even as the Fed has left the cost of borrowing unchanged.

In other trading, the dollar bought 1.2287 Swiss francs, down from 1.2418 late Thursday, and 1.0690 Canadian dollars , down from 1.0759.