Dollar Drifts Lower Against Major Rivals

(RTTNews) - The U.S. dollar drifted down against major counterparts on Friday as investors scaled back expectations on the Fed rate hikes amid indications of a slowdown in economic growth.

On Thursday, data showed that U.S. business activity slowed considerably in June, sparking fears about a slowdown in the economy.

Investors expect that the Fed is likely to lower the size of rate hikes after another 75 basis point increase in July.

Data from the Commerce Department showed a significant rebound in new home sales in the month of May. The report showed new home sales surged 10.7% to an annual rate of 696,000 in May after plunging 12% to an upwardly revised rate of 629,000 in April.

The spike surprised economists had expected new home sales to dip 0.5% to an annual rate of 588,000 from the 591,000 originally reported for the previous month.

Meanwhile, a separate report from the University of Michigan showed consumer sentiment in the U.S. tumbled by slightly more than initially estimated in the month of June.

The report showed the consumer sentiment index for June was downwardly revised to 50.0 from the preliminary reading of 50.2. The consumer sentiment index is down sharply from the final May reading of 58.4, plunging to its lowest level on record.

The steep drop by the headline index came as the current economic conditions index plunged to 53.8 in June from 53.3 in May, while the index of consumer expectations tumbled to 47.5 from 55.2.

The dollar index, which dropped to 103.95 around mid morning, regained some lost ground as the day progressed and was at 104.17 a little while ago, down 0.25% from the previous close.

Against the Euro, the dollar weakened to $1.0552 from $1.0524.

The dollar is down against Pound Sterling at $1.2274, after closing at $1.2261 on Thursday.

Against the Japanese currency, the dollar has firmed, fetching 135.21 yen a unit, up from 134.96.

The aussie climbed to 2-day highs of US$ 0.6942 against the greenback, gaining from US$ 0.6888.

Against Swiss franc, the dollar weakened to CHF 0.9588 from CHF 0.9615. on growing concerns about a recession fueled by aggressive rate hikes from the Federal Reserve to tame inflation.

The Loonie strengthened to $1.2896 a dollar, gaining about 0.8%, as oil prices rose sharply.