The U.S. dollar turned weak against other major currencies on Friday amid a drop in bond yields and upbeat euro zone economic data.
The dollar found some support after data showed a sharp surge in new home sales, and a marked improvement in activity in service and manufacturing sectors, but retreated subsequently.
Data released by the Commerce Department showed new home sales in U.S. skyrocketed by 20.7% to an annual rate of 1.021 million in March after plunging by 16.2% to a revised rate of 846,000 in February.
Economists had expected new home sales to spike by 14.3% to a rate of 886,000 from the 775,000 originally reported for the previous month. With the rebound, new home sales soared from the eight-month low set in February to their highest level since August of 2006.
The flash reading of the IHS Market US. composite purchasing managers index rose to a record high 62.2 in April from 59.7 in March, suggesting both the manufacturing and services sectors are recovering rapidly from the coronavirus pandemic.
The yield of 10-year Treasury Notes was somewhat static around 1.56%, falling nearly 0.2% from the previous week.
The dollar index dropped to 90.81, losing nearly 0.6% from previous close.
Against the Euro, the dollar weakened to 1.2096, sliding 0.65% from Thursday’s close. The flash reading of the IHS Markit eurozone composite purchasing managers index rose to a nine-month high of 53.7 in April from 53.2 in March.
France’s private sector returned to growth for the first time since August 2020, flash survey data from IHS Markit showed.
The Pound Sterling firmed up against the greenback, fetching $1.3884 a unit, compared with $1.3839 yesterday. The preliminary “flash” reading of the U.K. Composite Purchasing Managers’ Index (PMI) rose to 60.0 in April, the highest reading since November 2013, from 56.4 in March.
Meanwhile, U.K. retail sales grew more than expected in March, rising 5.4% month-on-month, faster than the 2.2% increase in February. The forecast was for an increase of 1.5%.
The Yen was stronger at 107.88 a dollar, firming up from 107.97.
The AUD-USD, at 0.7749, was firmer, gaining from 0.7707. The manufacturing sector in Australia is continuing to expand in April, and at a faster pace, flash estimate from Markit Economics revealed on Friday with a survey record manufacturing PMI score of 59.6. That’s up from 56.8 in March.
The Swiss franc, at 0.9137, was stronger, having firmed up from 0.9173, while the Loonie advanced to C$1.2477 a dollar, gaining from C$1.2507.