WASHINGTON (dpa-AFX) - The dollar took a hit Friday morning due to political uncertainty, following reports that President Donald Trump plans to remove national security adviser H.R. McMaster. However, the buck has bounced back following the release of some better than expected economic data.
New residential construction in the U.S. showed a sharp pullback in the month of February, according to a report released by the Commerce Department on Friday.
The report said housing starts plunged by 7.0 percent to an annual rate of 1.236 million in February after jumping by 10.1 percent to a revised 1.329 million in January.
Economists had expected housing starts to drop by 2.7 percent to a rate of 1.290 million from the 1.326 million originally reported for the previous month.
The Commerce Department said building permits also tumbled by 5.7 percent to a rate of 1.298 million in February after surging up by 5.9 percent to a revised 1.377 million in January.
Building permits, an indicator of future housing demand, had been expected to slump by 5.4 percent to a rate of 1.32 million from the 1.396 million originally reported for the previous month.
After reporting a modest decrease in U.S. industrial production in the previous month, the Federal Reserve released a report on Friday showing a substantial rebound in production in the month of February.
The Fed said industrial production surged up by 1.1 percent in February after dipping by a revised 0.3 percent in January. Economists had expected production to rise by 0.3 percent compared to the 0.1 percent downtick originally reported for the previous month.
A preliminary report released by the University of Michigan on Friday showed an unexpected improvement in U.S. consumer sentiment in the month of March. The preliminary reading on the consumer sentiment index for March came in at 102.0, up from the final February reading of 99.7. Economists had expected the index to edge down to 99.3.
The dollar dropped to a low of $1.2335 against the Euro Friday, but has since bounced back to around $1.2280.
Eurozone inflation eased more than estimated in February, final data from Eurostat showed Friday. Inflation slowed to revised 1.1 percent from 1.3 percent in January. A similar slower growth was last seen in December 2016. The flash estimate showed an annual inflation of 1.2 percent for February.
Eurozone labor costs annual growth eased for the second straight quarter in the three months ended December, though slightly, figures from Eurostat showed Friday. Hourly labor costs for the whole economy grew 1.5 percent year-over-year in the fourth quarter, just below the 1.6 percent rise in the third quarter.
Germany's wholesale price inflation eased in February after accelerating in the previous month, data from Destatis showed Friday. Wholesale prices climbed 1.2 percent year-over-year in February, slower than January's 2.0 percent rise.
The buck fell to a low of $1.3980 against the pound sterling Friday morning, but has since rebounded to around $1.3935.
Japan's government maintained its economic assessment for March, saying the economy is recovering at a moderate pace.
In its monthly economic report, the Cabinet Office said the economy is expected to continue recovering, supported by the effects of the policies, while employment and income situation is improving.
The greenback slipped to over a 1-week low of Y105.600 against the Japanese Yen Friday morning, but has since climbed to around Y106.150.
Japan's industrial production declined more than initially estimated in January, latest figures from the Ministry of Economy, Trade and Industry showed Friday. Industrial production fell a seasonally adjusted 6.8 percent month-over-month in January, faster than the 6.6 percent decrease reported earlier.
Copyright RTT News/dpa-AFX