The dollar declined against the euro, ending a three-day gain, on speculation U.S. reports today will show housing starts fell to a 17-year low and consumer confidence slumped to the weakest in 26 years.
The yen was set for its biggest weekly drop in a month to the dollar and euro as gains in Asian stocks encouraged investors to increase holdings of higher-yielding assets funded in Japan.
Demand for the dollar weakened after the Federal Reserve reported yesterday a 0.7% drop in industrial production last month, following a revised 0.2% gain in March.
The data diminished bets that the central bank will increase interest rates later this year. Futures on the Chicago Board of Trade show a 90% likelihood that the Fed will hold its target lending rate at 2% at its next meeting on June 25.
EUR/USD tested $1.5500 before rate retreated to $1.5482.
GBP/USD challenged $1.9455 lows before rose up to $1.9522. Later rate fell back to $1.9507.
USD/JPY declined from Y104.90 to Y104.26.
At 09:00 GMT EU trade balance is due to come. Meanwhile, today’s focus will be on US data, including housing starts and preliminary U Mich consumer confidence index. Analysts expect index rose to 64.0 from 62.6.