The dollar edged up on Friday, poised for weekly gains after solid U.S. economic data contrasted with cooling euro zone inflation, though it was set to book losses in the first quarter amid concerns about the direction of U.S. President Donald Trump’s policies.
The euro nursed losses, flat on the day at $1.0675 and down 1.1 percent for the week. It was up 0.9 percent for March, and 1.5 percent for the quarter.
German and Spanish consumer price data released on Thursday showed inflation slowed more sharply than expected in March as oil prices slumped, offering some respite to the European Central Bank as it faces pressure to wind down its monetary stimulus.
Revised U.S. gross domestic product data on Thursday showed that U.S. fourth quarter growth slowed less than previously reported as consumer spending provided a boost that was partially offset by the largest gain in imports in two years.
“The number itself wasn’t great but the forward-looking indicators look pretty good,” Jennifer Vail, head of fixed-income research for US Bank Wealth Management in Portland, Oregon said about the U.S. figures.
“You’re probably going to see some modest reaction to the softness we’re seeing in the eurozone, as it looks like some of the inflation data is not as strong as initially thought,” she said. “I think the reason you didn’t see more substantial dollar strength is concerns on the lack of conviction that our new president had in getting ACA repealed.”
Republicans withdrew their bill a week ago to replace and repeal the Obama administration’s Affordable Care Act (ACA) due to lack of support in Congress, raising concerns that Trump’s tax reform and stimulus measures might also face legislative challenges.
Trump lashed out on Thursday at Republican conservatives who helped torpedo the healthcare legislation, escalating a feud within his party.