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The dollar ended a relatively strong week back on its heels Friday, failing to withstand yet another round of troubling news from the housing front.
While preliminary data showed the US economy grew at a robust rate in the fourth quarter, lingering weakness in the pivotal jobs and housing sectors threaten to derail the government-aided recovery.
Sales of previously owned homes dropped again in January, adding to the sharp decline seen in the final month of last year. Existing home sales fell 7.2 percent in January compared to the previous month, according to a report released by the National Association of Realtors.
Looking further back, economic activity in the fourth quarter expanded by more than previously expected, according to a report released by the Commerce Department on Friday, with the upward revision partly due to a smaller than previously expected drop in inventories.
The report showed that gross domestic product increased at an annual rate of 5.9 percent in the fourth quarter compared to the advance estimate of 5.7 percent growth.
The dollar eased to 1.3680 versus the euro before firming up a bit in afternoon trading. With the retreat, the dollar pulled back from a recent 9-month high of 1.3444, which was challenged yesterday.
Meanwhile, the buck touched a 3-week low of 88.73 versus the yen, edging closer to last November's 1995 low near 85.
With policymakers in the US and EU unlikely to raise interest rates anytime soon, the yen has become a more attractive safe haven play in the past few weeks.
The dollar was not the weakest among majors on Friday, with that distinction held by the sterling. The dollar rose to a fresh 9-month high of 1.5150 amid concerns about the UK financial sector.
In economic news from overseas, euro area annual inflation rose to 1% in January from 0.9% in December, Eurostat said in a final report released on Friday. With prices in check, the European Central Bank has a free hand to keep interest rates at low levels to support the struggling eurozone economy.
British consumer confidence improved for the second month in February, the results of a closely watched survey show.
House prices in the U.K. fell 1% month-on-month in February, the Nationwide Building Society said Friday. That was the first fall in ten months. Economists had forecast 0.4% rise following a revised growth of 1.4% in January.
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