After drifting lower in the Asian session, the U.S. dollar gradually gained in strength on Friday after data showed a notable increase in U.S. producer prices in the month of August.
Dollar’s early weakness was due to increased risk appetite following reports U.S. President Joe Biden and Chinese President Xi Jinping had “a broad, strategic discussion,” on certain important economic issues, climate change and the pandemic.
The Labor Department said its producer price index for final demand climbed by 0.7% in August after jumping by 1% for two straight months. Economists had expected producer prices to increase by 0.6%.
The dollar index, which dropped to 92.33 in the Asian session, rose to 92.63 later in the day, gaining about 0.17%.
Against the Euro, the dollar firmed to $1.1813, from $1.1825.
The Pound Sterling gave up early gains against the dollar, and was flat at $1.3834 a little while ago. The UK economy logged weak growth in July as the output remained flat in services, and contracted further in construction on supply shortages, data from the Office for National Statistics showed on Friday.
Gross domestic product expanded 0.1% in July from June, when the economy grew 1%. This was also slower than the 0.6% growth economists had forecast. Although the economy expanded for the sixth consecutive month, output remained 2.1% below its pre-coronavirus pandemic level.
The Yen weakened to 109.89 a dollar, easing from 109.74.
Against the Aussie, the dollar firmed to 0.7351 from 0.7368. The Swiss franc weakened to 0.9184 a dollar from 0.9167.
The Loonie, which strengthened to 1.2584 a dollar after data showed continued growth in Canadian jobs, turned easy subsequently and is quoting at 1.2678 a dollar. Higher crude oil prices too supported the loonie.
Data from Statistics Canada showed that the economy added 90,200 jobs in August, after a gain of 94,000 jobs in July. Economists had expected employment to rise by 100,000 jobs.
The unemployment rate fell to 7.1% in August from 7.5%in July. The rate was forecast to fall to 7.3%.