The U.S. dollar lost ground against its major rivals on Friday as bond yields dropped amid increased demand for the safe-haven treasuries due to rising fears over inflation and slowing global economic growth.
The yield on U.S. 10-year Treasury Note dropped to around 1.48%.
Traders also followed the developments with regard to the infrastructure bill, and tracked the latest batch of economic data from the U.S. and Europe.
The U.S. House of Representatives delayed a vote on $550 billion infrastructure bill on Thursday as Democrats clashed over the size of the plan.
Senator Joe Manchin of West Virginia insisted that he would not support a spending package exceeding $1.5 trillion, while progressives wanted a broader $3.5 trillion package.
Inflation worries continued after Eurozone inflation accelerated for the third straight month in September, advancing to 3.4% from 3.0 percent in August. The rate was also above economists’ forecast of 3.3%.
Data from the Commerce Department showed that personal income crept up by 0.2% in August after jumping by 1.1% in July. Economists had expected income to rise by 0.3%.
Meanwhile, the report said personal spending climbed by 0.8% in August following a revised 0.1% dip in July.
A report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. manufacturing activity but noted persistent supply chain issues.
The ISM said is manufacturing PMI crept up to 61.1 in September from 59.9 in August, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to edge down to 59.6.
The dollar index drifted down to 93.99, losing more than 0.25%.
Against the Euro, the dollar weakened to 1.1597 from 1.1577. Eurozone inflation accelerated for the third straight month and hit the highest level in thirteen years in September, advancing to 3.4% in the month from 3% in August, flash data from Eurostat showed. The rate was also above economists’ forecast of 3.3%.
The Pound Sterling strengthened against the dollar, fetching $1.3549 a unit, compared to $1.3474 Thursday evening. The U.K.’s manufacturing sector saw growth slowing last month on the back of surging material and staff shortages.
The Yen firmed to 111.04 a dollar, gaining from 111.28. Data from the Ministry of Internal Affairs and Communications showed that Japan jobless rate came in at a seasonally adjusted 2.8% in August.
That was unchanged from the July reading, although it exceeded expectations for a rate of 2.9%.
Against the Aussie, the dollar dropped to 0.7266 from 0.7226.
The Swiss franc weakened to 0.9305 against the dollar, from 0.9320.
The Loonie firmed to 1.2639 a dollar, gaining from 1.2628, thanks to rising oil prices.