Dollar Recovers After Early Weakness, Scores Gains Against Some Major Rivals

(RTTNews) - The U.S. dollar tumbled in the Asian session on Friday, but recovered gradually thereafter and managed to post gains against some of its major counterparts amid optimism about the health of the world's largest economy.

In economic news, a report released by the Commerce Department showed personal income in the U.S. increased in line with economist estimates in the month of August, climbing by 0.4 percent after rising by 0.2 percent in July.

The Commerce Department said personal spending also increased by 0.4 percent in August after jumping by an upwardly revised 0.9 percent in July.

Economists had expected personal spending to rise by 0.4 percent compared to the 0.8 percent advance originally reported for the previous month.

The report also said the annual rate of consumer price growth accelerated to 3.5 percent in August from 3.4 percent in July. The modest acceleration matched economist estimates.

Meanwhile, the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 3.9 percent in August from 4.3 percent in July. The slowdown also matched expectations.

A report from the Institute for Supply Management (ISM) said the Chicago Business Barometer (Chicago PMI) fell to 44.1 in September, from 48.7 in August, contracting for the 13th consecutive month.

The University of Michigan said in its report that the consumer sentiment in the U.S. was revised higher to 68.1 in September from a preliminary 67.7.

The dollar index dropped to 105.66 in the Asian session, but rallied to 106.24 in the New York session. The index was last seen at 106.16, down just marginally from the previous close.

Against the Euro, the dollar recovered to 1.0578 from 1.0620, and against Pound Sterling was flat at 1.2204, firming from 1.2273.

The dollar is up slightly against the Japanese currency, fetching 149.36 yen a unit. Against the Aussie, the dollar recovered to 0.6434 from 0.6502, recording a modest gain.

The dollar gained marginally against Swiss franc at CHF 0.9154, rallying from CHF 0.9091. Against the Loonie, the dollar strengthened to C$1.3576, rising from the previous close of C$1.3488.